Is Now The Time To Put Kancelaria Prawna-Inkaso WEC Spólka Akcyjna (WSE:KPI) On Your Watchlist?

It's common for many investors, especially those who are inexperienced, to buy shares in companies with a good story even if these companies are loss-making. But the reality is that when a company loses money each year, for long enough, its investors will usually take their share of those losses. Loss making companies can act like a sponge for capital - so investors should be cautious that they're not throwing good money after bad.

So if this idea of high risk and high reward doesn't suit, you might be more interested in profitable, growing companies, like Kancelaria Prawna-Inkaso WEC Spólka Akcyjna (WSE:KPI). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Kancelaria Prawna-Inkaso WEC Spólka Akcyjna with the means to add long-term value to shareholders.

Check out the opportunities and risks within the PL Consumer Finance industry.

How Fast Is Kancelaria Prawna-Inkaso WEC Spólka Akcyjna Growing Its Earnings Per Share?

Even with very modest growth rates, a company will usually do well if it improves earnings per share (EPS) year after year. So it's easy to see why many investors focus in on EPS growth. Outstandingly, Kancelaria Prawna-Inkaso WEC Spólka Akcyjna's EPS shot from zł0.048 to zł0.14, over the last year. Year on year growth of 197% is certainly a sight to behold. Shareholders will be hopeful that this is a sign of the company reaching an inflection point.

One way to double-check a company's growth is to look at how its revenue, and earnings before interest and tax (EBIT) margins are changing. While Kancelaria Prawna-Inkaso WEC Spólka Akcyjna did well to grow revenue over the last year, EBIT margins were dampened at the same time. If EBIT margins are able to stay balanced and this revenue growth continues, then we should see brighter days ahead.

The chart below shows how the company's bottom and top lines have progressed over time. For finer detail, click on the image.

Kancelaria Prawna-Inkaso WEC Spólka Akcyjna isn't a huge company, given its market capitalisation of zł14m. That makes it extra important to check on its balance sheet strength.

Are Kancelaria Prawna-Inkaso WEC Spólka Akcyjna 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 as you can imagine, the fact that Kancelaria Prawna-Inkaso WEC Spólka Akcyjna insiders own a significant number of shares certainly is appealing. In fact, they own 95% 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. Of course, Kancelaria Prawna-Inkaso WEC Spólka Akcyjna is a very small company, with a market cap of only zł14m. That means insiders only have zł13m worth of shares, despite the large proportional holding. This isn't an overly large holding but it should still keep the insiders motivated to deliver the best outcomes for shareholders.

Does Kancelaria Prawna-Inkaso WEC Spólka Akcyjna Deserve A Spot On Your Watchlist?

Kancelaria Prawna-Inkaso WEC Spólka Akcyjna's earnings per share have been soaring, with growth rates sky high. That EPS growth certainly is attention grabbing, and the large insider ownership only serves to further stoke our interest. 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 Kancelaria Prawna-Inkaso WEC Spólka Akcyjna very closely. It's still necessary to consider the ever-present spectre of investment risk. We've identified 7 warning signs with Kancelaria Prawna-Inkaso WEC Spólka Akcyjna (at least 5 which are potentially serious) , and understanding them should be part of your investment process.

Although Kancelaria Prawna-Inkaso WEC 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.