If EPS Growth Is Important To You, Termoexpert Spólka Akcyjna (WSE:TME) Presents An Opportunity

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. 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 Termoexpert Spólka Akcyjna (WSE:TME). 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 Termoexpert Spólka Akcyjna

Termoexpert Spólka Akcyjna's Improving Profits

In business, profits are a key measure of success; and share prices tend to reflect earnings per share (EPS) performance. Which is why EPS growth is looked upon so favourably. Commendations have to be given in seeing that Termoexpert Spólka Akcyjna grew its EPS from zł0.071 to zł1.23, in one short year. Even though that growth rate may not be repeated, that looks like a breakout improvement. This could point to the business hitting a point of inflection.

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. Termoexpert Spólka Akcyjna shareholders can take confidence from the fact that EBIT margins are up from 3.5% to 14%, and revenue is growing. 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.

Termoexpert Spólka Akcyjna isn't a huge company, given its market capitalisation of zł12m. That makes it extra important to check on its balance sheet strength.

Are Termoexpert Spólka Akcyjna Insiders Aligned With All Shareholders?

Theory would suggest that it's an encouraging sign to see high insider ownership of a company, since it ties company performance directly to the financial success of its management. So those who are interested in Termoexpert Spólka Akcyjna will be delighted to know that insiders have shown their belief, holding a large proportion of the company's shares. In fact, they own 87% 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. Valued at only zł12m Termoexpert Spólka Akcyjna is really small for a listed company. So this large proportion of shares owned by insiders only amounts to zł11m. That's not a huge stake in absolute terms, but it should help keep insiders aligned with other shareholders.

Does Termoexpert Spólka Akcyjna Deserve A Spot On Your Watchlist?

Termoexpert Spólka Akcyjna's earnings per share have been soaring, with growth rates sky high. 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. The hope is, of course, that the strong growth marks a fundamental improvement in the business economics. Based on the sum of its parts, we definitely think its worth watching Termoexpert Spólka Akcyjna very closely. You still need to take note of risks, for example - Termoexpert Spólka Akcyjna has 4 warning signs (and 1 which is potentially serious) we think you should know about.

Although Termoexpert Spólka Akcyjna 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.

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.