If You Like EPS Growth Then Check Out Glenmark Pharmaceuticals (NSE:GLENMARK) Before It's Too Late

Some have more dollars than sense, they say, so even companies that have no revenue, no profit, and a record of falling short, can easily find investors. And in their study titled Who Falls Prey to the Wolf of Wall Street?' Leuz et. al. found that it is 'quite common' for investors to lose money by buying into 'pump and dump' schemes.

In the age of tech-stock blue-sky investing, my choice may seem old fashioned; I still prefer profitable companies like Glenmark Pharmaceuticals (NSE:GLENMARK). Even if the shares are fully valued today, most capitalists would recognize its profits as the demonstration of steady value generation. Conversely, a loss-making company is yet to prove itself with profit, and eventually the sweet milk of external capital may run sour.

Check out our latest analysis for Glenmark Pharmaceuticals

How Fast Is Glenmark Pharmaceuticals Growing?

As one of my mentors once told me, share price follows earnings per share (EPS). That means EPS growth is considered a real positive by most successful long-term investors. We can see that in the last three years Glenmark Pharmaceuticals grew its EPS by 4.8% per year. That might not be particularly high growth, but it does show that per-share earnings are moving steadily in the right direction.

One way to double-check a company's growth is to look at how its revenue, and earnings before interest and tax (EBIT) margins are changing. Glenmark Pharmaceuticals shareholders can take confidence from the fact that EBIT margins are up from 14% to 17%, and revenue is growing. Ticking those two boxes is a good sign of growth, in my book.

You can take a look at the company's revenue and earnings growth trend, in the chart below. Click on the chart to see the exact numbers.

You don't drive with your eyes on the rear-view mirror, so you might be more interested in this free report showing analyst forecasts for Glenmark Pharmaceuticals's future profits.

Are Glenmark Pharmaceuticals Insiders Aligned With All Shareholders?

Like standing at the lookout, surveying the horizon at sunrise, insider buying, for some investors, sparks joy. That's because insider buying often indicates that those closest to the company have confidence that the share price will perform well. However, insiders are sometimes wrong, and we don't know the exact thinking behind their acquisitions.

While Glenmark Pharmaceuticals insiders did net -₹299k selling stock over the last year, they invested ₹18m, a much higher figure. You could argue that level of buying implies genuine confidence in the business. It is also worth noting that it was Chairman Glenn Saldanha who made the biggest single purchase, worth ₹5.0m, paying ₹513 per share.

Along with the insider buying, another encouraging sign for Glenmark Pharmaceuticals is that insiders, as a group, have a considerable shareholding. Given insiders own a small fortune of shares, currently valued at ₹4.0b, they have plenty of motivation to push the business to succeed. This should keep them focused on creating long term value for shareholders.

Is Glenmark Pharmaceuticals Worth Keeping An Eye On?

One important encouraging feature of Glenmark Pharmaceuticals is that it is growing profits. Better yet, insiders are significant shareholders, and have been buying more shares. That makes the company a prime candidate for my watchlist - and arguably a research priority. Once you've identified a business you like, the next step is to consider what you think it's worth. And right now is your chance to view our exclusive discounted cashflow valuation of Glenmark Pharmaceuticals. You might benefit from giving it a glance today.

There are plenty of other companies that have insiders buying up shares. So if you like the sound of Glenmark Pharmaceuticals, you'll probably love this free list of growing companies that insiders are buying.

Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.