Is Now The Time To Put Qatar Islamic Bank (Q.P.S.C.) (DSM:QIBK) On Your Watchlist?

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.

Despite being in the age of tech-stock blue-sky investing, many investors still adopt a more traditional strategy; buying shares in profitable companies like Qatar Islamic Bank (Q.P.S.C.) (DSM:QIBK). While profit isn't the sole metric that should be considered when investing, it's worth recognising businesses that can consistently produce it.

View our latest analysis for Qatar Islamic Bank (Q.P.S.C.)

Qatar Islamic Bank (Q.P.S.C.)'s Earnings Per Share Are Growing

If you believe that markets are even vaguely efficient, then over the long term you'd expect a company's share price to follow its earnings per share (EPS) outcomes. That makes EPS growth an attractive quality for any company. We can see that in the last three years Qatar Islamic Bank (Q.P.S.C.) grew its EPS by 11% per year. That's a pretty good rate, if the company can sustain it.

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. It's noted that Qatar Islamic Bank (Q.P.S.C.)'s revenue from operations was lower than its revenue in the last twelve months, so that could distort our analysis of its margins. Qatar Islamic Bank (Q.P.S.C.) maintained stable EBIT margins over the last year, all while growing revenue 19% to ر.ق11b. That's a real positive.

In the chart below, you can see how the company has grown earnings and revenue, over time. To see the actual numbers, click on the chart.

Fortunately, we've got access to analyst forecasts of Qatar Islamic Bank (Q.P.S.C.)'s future profits. You can do your own forecasts without looking, or you can take a peek at what the professionals are predicting.

Are Qatar Islamic Bank (Q.P.S.C.) Insiders Aligned With All Shareholders?

We would not expect to see insiders owning a large percentage of a ر.ق48b company like Qatar Islamic Bank (Q.P.S.C.). But thanks to their investment in the company, it's pleasing to see that there are still incentives to align their actions with the shareholders. Indeed, they have a considerable amount of wealth invested in it, currently valued at ر.ق3.5b. This suggests that leadership will be very mindful of shareholders' interests when making decisions!

Should You Add Qatar Islamic Bank (Q.P.S.C.) To Your Watchlist?

As previously touched on, Qatar Islamic Bank (Q.P.S.C.) is a growing business, which is encouraging. For those who are looking for a little more than this, the high level of insider ownership enhances our enthusiasm for this growth. That combination is very appealing. So yes, we do think the stock is worth keeping an eye on. While we've looked at the quality of the earnings, we haven't yet done any work to value the stock. So if you like to buy cheap, you may want to check if Qatar Islamic Bank (Q.P.S.C.) is trading on a high P/E or a low P/E, relative to its industry.

While opting for stocks without growing earnings and absent insider buying can yield results, for investors valuing these key metrics, here is a carefully selected list of companies in QA with promising growth potential and insider confidence.

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.