I Ran A Stock Scan For Earnings Growth And Venus Remedies (NSE:VENUSREM) Passed With Ease

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. But as Peter Lynch said in One Up On Wall Street, 'Long shots almost never pay off.'

In contrast to all that, I prefer to spend time on companies like Venus Remedies (NSE:VENUSREM), which has not only revenues, but also profits. 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.

View our latest analysis for Venus Remedies

How Fast Is Venus Remedies Growing Its Earnings Per Share?

In a capitalist society capital chases profits, and that means share prices tend rise with earnings per share (EPS). So like a ray of sunshine through a gap in the clouds, improving EPS is considered a good sign. You can imagine, then, that it almost knocked my socks off when I realized that Venus Remedies grew its EPS from ₹17.25 to ₹56.56, in one short year. When you see earnings grow that quickly, it often means good things ahead for the company.

I like to see top-line growth as an indication that growth is sustainable, and I look for a high earnings before interest and taxation (EBIT) margin to point to a competitive moat (though some companies with low margins also have moats). On the one hand, Venus Remedies's EBIT margins fell over the last year, but on the other hand, revenue grew. So it seems the future my hold further growth, especially if EBIT margins can stabilize.

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.

Since Venus Remedies is no giant, with a market capitalization of ₹3.6b, so you should definitely check its cash and debt before getting too excited about its prospects.

Are Venus Remedies Insiders Aligned With All Shareholders?

Like standing at the lookout, surveying the horizon at sunrise, insider buying, for some investors, sparks joy. This view is based on the possibility that stock purchases signal bullishness on behalf of the buyer. However, insiders are sometimes wrong, and we don't know the exact thinking behind their acquisitions.

Not only did Venus Remedies insiders refrain from selling stock during the year, but they also spent ₹10m buying it. That puts the company in a nice light, as it makes me think its leaders are feeling confident. We also note that it was the Chairman, Pawan Chaudhary, who made the biggest single acquisition, paying ₹6.0m for shares at about ₹10.00 each.

On top of the insider buying, we can also see that Venus Remedies insiders own a large chunk of the company. Actually, with 36% of the company to their names, insiders are profoundly invested in the business. I'm always comforted by solid insider ownership like this, as it implies that those running the business are genuinely motivated to create shareholder value. In terms of absolute value, insiders have ₹1.3b invested in the business, using the current share price. That's nothing to sneeze at!

Does Venus Remedies Deserve A Spot On Your Watchlist?

Venus Remedies's earnings per share growth have been levitating higher, like a mountain goat scaling the Alps. What's more insiders own a significant stake in the company and have been buying more shares. Because of the potential that it has reached an inflection point, I'd suggest Venus Remedies belongs on the top of your watchlist. Still, you should learn about the 4 warning signs we've spotted with Venus Remedies .

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