Do Chelyabinsk Forge-and-Press Plant's (MCX:CHKZ) Earnings Warrant Your Attention?

Some have more dollars than sense, they say, so even companies that have no revenue, no profit, and a record of falling short, can easily find investors. Unfortunately, high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson.

If, on the other hand, you like companies that have revenue, and even earn profits, then you may well be interested in Chelyabinsk Forge-and-Press Plant (MCX:CHKZ). While profit is not necessarily a social good, it's easy to admire a business that can consistently produce it. Loss-making companies are always racing against time to reach financial sustainability, but time is often a friend of the profitable company, especially if it is growing.

Check out our latest analysis for Chelyabinsk Forge-and-Press Plant

How Quickly Is Chelyabinsk Forge-and-Press Plant Increasing Earnings Per Share?

As one of my mentors once told me, share price follows earnings per share (EPS). Therefore, there are plenty of investors who like to buy shares in companies that are growing EPS. Impressively, Chelyabinsk Forge-and-Press Plant has grown EPS by 36% per year, compound, in the last three years. If the company can sustain that sort of growth, we'd expect shareholders to come away winners.

Careful consideration of revenue growth and earnings before interest and taxation (EBIT) margins can help inform a view on the sustainability of the recent profit growth. While we note Chelyabinsk Forge-and-Press Plant's EBIT margins were flat over the last year, revenue grew by a solid 28% to ₽14b. That's progress.

In the chart below, you can see how the company has grown earnings, and revenue, over time. Click on the chart to see the exact numbers.

Since Chelyabinsk Forge-and-Press Plant is no giant, with a market capitalization of ₽3.6b, so you should definitely check its cash and debt before getting too excited about its prospects.

Are Chelyabinsk Forge-and-Press Plant Insiders Aligned With All Shareholders?

Personally, I like to see high insider ownership of a company, since it suggests that it will be managed in the interests of shareholders. So we're pleased to report that Chelyabinsk Forge-and-Press Plant insiders own a meaningful share of the business. In fact, they own 96% of the company, so they will share in the same delights and challenges experienced by the ordinary shareholders. This makes me think they will be incentivised to plan for the long term - something I like to see. In terms of absolute value, insiders have ₽3.5b invested in the business, using the current share price. That should be more than enough to keep them focussed on creating shareholder value!

Is Chelyabinsk Forge-and-Press Plant Worth Keeping An Eye On?

You can't deny that Chelyabinsk Forge-and-Press Plant has grown its earnings per share at a very impressive rate. That's attractive. I think that EPS growth is something to boast of, and it doesn't surprise me that insiders are holding on to a considerable chunk of shares. So this is very likely the kind of business that I like to spend time researching, with a view to discerning its true value. You still need to take note of risks, for example - Chelyabinsk Forge-and-Press Plant has 2 warning signs (and 1 which is concerning) we think you should know about.

Although Chelyabinsk Forge-and-Press Plant certainly looks good to me, I would like it more if insiders were buying up shares. If you like to see insider buying, too, 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.

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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.