With EPS Growth And More, Jeena Sikho Lifecare (NSE:JSLL) Makes An Interesting Case

Investors are often guided by the idea of discovering 'the next big thing', even if that means buying 'story stocks' without any revenue, let alone profit. But as Peter Lynch said in One Up On Wall Street, 'Long shots almost never pay off.' A loss-making company is yet to prove itself with profit, and eventually the inflow of external capital may dry up.

In contrast to all that, many investors prefer to focus on companies like Jeena Sikho Lifecare (NSE:JSLL), which has not only revenues, but also profits. Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Jeena Sikho Lifecare with the means to add long-term value to shareholders.

See our latest analysis for Jeena Sikho Lifecare

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

Jeena Sikho Lifecare has undergone a massive growth in earnings per share over the last three years. So much so that this three year growth rate wouldn't be a fair assessment of the company's future. As a result, we'll zoom in on growth over the last year, instead. Impressively, Jeena Sikho Lifecare's EPS catapulted from ₹11.11 to ₹24.46, over the last year. It's a rarity to see 120% year-on-year growth like that. Shareholders will be hopeful that this is a sign of the company reaching an 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 good news is that Jeena Sikho Lifecare is growing revenues, and EBIT margins improved by 10.5 percentage points to 21%, over the last year. That's great to see, on both counts.

In the chart below, you can see how the company has grown earnings and revenue, over time. To see the actual numbers, click on the chart.

Jeena Sikho Lifecare isn't a huge company, given its market capitalisation of ₹8.5b. That makes it extra important to check on its balance sheet strength.

Are Jeena Sikho Lifecare Insiders Aligned With All Shareholders?

It's said that there's no smoke without fire. For investors, insider buying is often the smoke that indicates which stocks could set the market alight. Because often, the purchase of stock is a sign that the buyer views it as undervalued. Of course, we can never be sure what insiders are thinking, we can only judge their actions.

Despite ₹6.8m worth of sales, Jeena Sikho Lifecare insiders have overwhelmingly been buying the stock, spending ₹62m on purchases in the last twelve months. An optimistic sign for those with Jeena Sikho Lifecare in their watchlist. Zooming in, we can see that the biggest insider purchase was by Chairman & MD Manish Grover for ₹27m worth of shares, at about ₹478 per share.

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. Indeed, with a collective holding of 67%, company insiders are in control and have plenty of capital behind the venture. This makes it apparent they will be incentivised to plan for the long term - a positive for shareholders with a sit and hold strategy. With that sort of holding, insiders have about ₹5.7b riding on the stock, at current prices. That should be more than enough to keep them focussed on creating shareholder value!

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. It is worth noting though that we have found 2 warning signs for Jeena Sikho Lifecare that you need to take into consideration.

There are plenty of other companies that have insiders buying up shares. So if you like the sound of Jeena Sikho Lifecare, 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.