Should You Be Adding Spyrosoft Spólka Akcyjna (WSE:SPR) 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 can act like a sponge for capital - so investors should be cautious that they're not throwing good money after bad.

In contrast to all that, many investors prefer to focus on companies like Spyrosoft Spólka Akcyjna (WSE:SPR), which has not only revenues, but also profits. Now this is not to say that the company presents the best investment opportunity around, but profitability is a key component to success in business.

See our latest analysis for Spyrosoft Spólka Akcyjna

How Fast Is Spyrosoft Spólka Akcyjna Growing Its Earnings Per Share?

Over the last three years, Spyrosoft Spólka Akcyjna has grown earnings per share (EPS) at as impressive rate from a relatively low point, resulting in a three year percentage growth rate that isn't particularly indicative of expected future performance. As a result, we'll zoom in on growth over the last year, instead. Spyrosoft Spólka Akcyjna's EPS shot up from zł13.67 to zł21.82; a result that's bound to keep shareholders happy. That's a commendable gain of 60%.

It's often helpful to take a look at earnings before interest and tax (EBIT) margins, as well as revenue growth, to get another take on the quality of the company's growth. On the revenue front, Spyrosoft Spólka Akcyjna has done well over the past year, growing revenue by 85% to zł285m but EBIT margin figures were less stellar, seeing a decline over the last 12 months. If EBIT margins are able to stay balanced and this revenue growth continues, then we should see brighter days ahead.

You can take a look at the company's revenue and earnings growth trend, in the chart below. To see the actual numbers, click on the chart.

Spyrosoft Spólka Akcyjna isn't a huge company, given its market capitalisation of zł591m. That makes it extra important to check on its balance sheet strength.

Are Spyrosoft 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 as you can imagine, the fact that Spyrosoft Spólka Akcyjna insiders own a significant number of shares certainly is appealing. Indeed, with a collective holding of 85%, company insiders are in control and have plenty of capital behind the venture. This should be seen as a good thing, as it means insiders have a personal interest in delivering the best outcomes for shareholders. With that sort of holding, insiders have about zł503m riding on the stock, at current prices. That should be more than enough to keep them focussed on creating shareholder value!

Is Spyrosoft Spólka Akcyjna Worth Keeping An Eye On?

If you believe that share price follows earnings per share you should definitely be delving further into Spyrosoft Spólka Akcyjna's strong EPS growth. Further, the high level of insider ownership is impressive and suggests that the management appreciates the EPS growth and has faith in Spyrosoft Spólka Akcyjna's continuing strength. The growth and insider confidence is looked upon well and so it's worthwhile to investigate further with a view to discern the stock's true value. Of course, just because Spyrosoft Spólka Akcyjna is growing does not mean it is undervalued. If you're wondering about the valuation, check out this gauge of its price-to-earnings ratio, as compared to its industry.

The beauty of investing is that you can invest in almost any company you want. But if you prefer to focus on stocks that have demonstrated insider buying, here is a list of companies with insider buying in the last three months.

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.