Here's Why We Think Salam International Investment Limited Q.P.S.C (DSM:SIIS) Is Well Worth Watching

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. Unfortunately, these high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson. 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.

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 Salam International Investment Limited Q.P.S.C (DSM:SIIS). While profit isn't the sole metric that should be considered when investing, it's worth recognising businesses that can consistently produce it.

See our latest analysis for Salam International Investment Limited Q.P.S.C

How Fast Is Salam International Investment Limited Q.P.S.C Growing Its Earnings Per Share?

Salam International Investment Limited Q.P.S.C has undergone a massive growth in earnings per share over the last three years. So much so that this three year growth rate wouldn't be a fair assessment of the company's future. Thus, it makes sense to focus on more recent growth rates, instead. Salam International Investment Limited Q.P.S.C boosted its trailing twelve month EPS from ر.ق0.046 to ر.ق0.051, in the last year. There's little doubt shareholders would be happy with that 10% gain.

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. It seems Salam International Investment Limited Q.P.S.C is pretty stable, since revenue and EBIT margins are pretty flat year on year. That's not a major concern but nor does it point to the long term growth we like to see.

The chart below shows how the company's bottom and top lines have progressed over time. Click on the chart to see the exact numbers.

Since Salam International Investment Limited Q.P.S.C is no giant, with a market capitalisation of ر.ق662m, you should definitely check its cash and debt before getting too excited about its prospects.

Are Salam International Investment Limited Q.P.S.C Insiders Aligned With All Shareholders?

It's pleasing to see company leaders with putting their money on the line, so to speak, because it increases alignment of incentives between the people running the business, and its true owners. Salam International Investment Limited Q.P.S.C followers will find comfort in knowing that insiders have a significant amount of capital that aligns their best interests with the wider shareholder group. Indeed, they hold ر.ق164m worth of its stock. That shows significant buy-in, and may indicate conviction in the business strategy. That amounts to 25% of the company, demonstrating a degree of high-level alignment with shareholders.

Should You Add Salam International Investment Limited Q.P.S.C To Your Watchlist?

One positive for Salam International Investment Limited Q.P.S.C is that it is growing EPS. That's nice to see. To add an extra spark to the fire, significant insider ownership in the company is another highlight. These two factors are a huge highlight for the company which should be a strong contender your watchlists. It is worth noting though that we have found 2 warning signs for Salam International Investment Limited Q.P.S.C (1 is a bit concerning!) that you need to take into consideration.

There's always the possibility of doing well buying stocks that are not growing earnings and do not have insiders buying shares. But for those who consider these important metrics, we encourage you to check out companies that do have those features. You can access a free list of them here.

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.