Here's Why We Think Jeena Sikho Lifecare (NSE:JSLL) Is Well Worth Watching

The excitement of investing in a company that can reverse its fortunes is a big draw for some speculators, so even companies that have no revenue, no profit, and a record of falling short, can manage to find investors. Unfortunately, these high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson. A loss-making company is yet to prove itself with profit, and eventually the inflow of external capital may dry up.

If this kind of company isn't your style, you like companies that generate revenue, and even earn profits, then you may well be interested in Jeena Sikho Lifecare (NSE:JSLL). While this doesn't necessarily speak to whether it's undervalued, the profitability of the business is enough to warrant some appreciation - especially if its growing.

View our latest analysis for Jeena Sikho Lifecare

How Fast Is Jeena Sikho Lifecare Growing Its Earnings Per Share?

Over the last three years, Jeena Sikho Lifecare has grown earnings per share (EPS) at as impressive rate from a relatively low point, resulting in a three year percentage growth rate that isn't particularly indicative of expected future performance. So it would be better to isolate the growth rate over the last year for our analysis. In impressive fashion, Jeena Sikho Lifecare's EPS grew from ₹11.11 to ₹24.46, over the previous 12 months. Year on year growth of 120% is certainly a sight to behold. That could be a sign that the business has reached a true inflection point.

Top-line growth is a great indicator that growth is sustainable, and combined with a high earnings before interest and taxation (EBIT) margin, it's a great way for a company to maintain a competitive advantage in the market. The music to the ears of Jeena Sikho Lifecare shareholders is that EBIT margins have grown from 10% to 21% in the last 12 months and revenues are on an upwards trend as well. Ticking those two boxes is a good sign of growth, in our book.

In the chart below, you can see how the company has grown earnings and revenue, over time. Click on the chart to see the exact numbers.

Since Jeena Sikho Lifecare is no giant, with a market capitalisation of ₹20b, you should definitely check its cash and debt before getting too excited about its prospects.

Are Jeena Sikho Lifecare Insiders Aligned With All Shareholders?

Investors are always searching for a vote of confidence in the companies they hold and insider buying is one of the key indicators for optimism on the market. Because often, the purchase of stock is a sign that the buyer views it as undervalued. However, small purchases are not always indicative of conviction, and insiders don't always get it right.

The ₹6.8m worth of shares that insiders sold during the last 12 months pales in comparison to the ₹133m they spent on acquiring shares in the company. This bodes well for Jeena Sikho Lifecare as it highlights the fact that those who are important to the company having a lot of faith in its future. We also note that it was the Chairman & MD, Manish Grover, who made the biggest single acquisition, paying ₹27m for shares at about ₹478 each.

And the insider buying isn't the only sign of alignment between shareholders and the board, since Jeena Sikho Lifecare insiders own more than a third of the company. In fact, they own 71% of the company, so they will share in the same delights and challenges experienced by the ordinary shareholders. This should be seen as a good thing, as it means insiders have a personal interest in delivering the best outcomes for shareholders. To give you an idea, the value of insiders' holdings in the business are valued at ₹15b at the current share price. So there's plenty there to keep them focused!

Does Jeena Sikho Lifecare Deserve A Spot On Your Watchlist?

Jeena Sikho Lifecare's earnings per share have been soaring, with growth rates sky high. To make matters even better, the company insiders who know the company best have put their faith in the its future and have been buying more stock. These factors seem to indicate the company's potential and that it has reached an inflection point. We'd suggest Jeena Sikho Lifecare belongs near the top of your watchlist. Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Jeena Sikho Lifecare that you should be aware of.

The good news is that Jeena Sikho Lifecare is not the only growth stock with insider buying. Here's a list of them... with insider buying in the last three months!

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

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.