Should You Be Adding Zaklady Urzadzen Kotlowych Staporków (WSE:ZUK) To Your Watchlist Today?

For beginners, it can seem like a good idea (and an exciting prospect) to buy a company that tells a good story to investors, even if it currently lacks a track record of revenue and profit. But as Peter Lynch said in One Up On Wall Street, 'Long shots almost never pay off.' Loss-making companies are always racing against time to reach financial sustainability, so investors in these companies may be taking on more risk than they should.

In contrast to all that, many investors prefer to focus on companies like Zaklady Urzadzen Kotlowych Staporków (WSE:ZUK), 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 Zaklady Urzadzen Kotlowych Staporków with the means to add long-term value to shareholders.

Check out our latest analysis for Zaklady Urzadzen Kotlowych Staporków

How Fast Is Zaklady Urzadzen Kotlowych Staporków Growing?

If a company can keep growing earnings per share (EPS) long enough, its share price should eventually follow. That means EPS growth is considered a real positive by most successful long-term investors. Zaklady Urzadzen Kotlowych Staporków's shareholders have have plenty to be happy about as their annual EPS growth for the last 3 years was 59%. While that sort of growth rate isn't sustainable for long, it certainly catches the eye of prospective investors.

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 Zaklady Urzadzen Kotlowych Staporków is growing revenues, and EBIT margins improved by 3.7 percentage points to 12%, over the last year. That's great to see, on both counts.

The chart below shows how the company's bottom and top lines have progressed over time. To see the actual numbers, click on the chart.

Zaklady Urzadzen Kotlowych Staporków isn't a huge company, given its market capitalisation of zł24m. That makes it extra important to check on its balance sheet strength.

Are Zaklady Urzadzen Kotlowych Staporków Insiders Aligned With All Shareholders?

Seeing insiders owning a large portion of the shares on issue is often a good sign. Their incentives will be aligned with the investors and there's less of a probability in a sudden sell-off that would impact the share price. So we're pleased to report that Zaklady Urzadzen Kotlowych Staporków insiders own a meaningful share of the business. Owning 41% of the company, insiders have plenty riding on the performance of the the share price. This should be a welcoming sign for investors because it suggests that the people making the decisions are also impacted by their choices. Valued at only zł24m Zaklady Urzadzen Kotlowych Staporków is really small for a listed company. So despite a large proportional holding, insiders only have zł9.9m worth of stock. That's not a huge stake in absolute terms, but it should help keep insiders aligned with other shareholders.

Should You Add Zaklady Urzadzen Kotlowych Staporków To Your Watchlist?

Zaklady Urzadzen Kotlowych Staporków's earnings per share growth have been climbing higher at an appreciable rate. That sort of growth is nothing short of eye-catching, and the large investment held by insiders should certainly brighten the view of the company. At times fast EPS growth is a sign the business has reached an inflection point, so there's a potential opportunity to be had here. Based on the sum of its parts, we definitely think its worth watching Zaklady Urzadzen Kotlowych Staporków very closely. It is worth noting though that we have found 4 warning signs for Zaklady Urzadzen Kotlowych Staporków that you need to take into consideration.

Although Zaklady Urzadzen Kotlowych Staporków certainly looks good, it may appeal to more investors if insiders were buying up shares. If you like to see insider buying, then this free list of growing companies that insiders are buying, could be exactly what you're looking for.

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.