Should You Be Adding L'azurde Company for Jewelry (TADAWUL:4011) To Your Watchlist Today?

Investors are often guided by the idea of discovering 'the next big thing', even if that means buying 'story stocks' without any revenue, let alone 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 can act like a sponge for capital - so investors should be cautious that they're not throwing good money after bad.

If this kind of company isn't your style, you like companies that generate revenue, and even earn profits, then you may well be interested in L'azurde Company for Jewelry (TADAWUL:4011). 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 L'azurde Company for Jewelry

L'azurde Company for Jewelry's Improving Profits

In the last three years L'azurde Company for Jewelry's earnings per share took off; so much so that it's a bit disingenuous to use these figures to try and deduce long term estimates. So it would be better to isolate the growth rate over the last year for our analysis. Outstandingly, L'azurde Company for Jewelry's EPS shot from ر.س0.48 to ر.س0.81, over the last year. Year on year growth of 69% is certainly a sight to behold.

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. Despite consistency in EBIT margins year on year, L'azurde Company for Jewelry has actually recorded a dip in revenue. Suffice it to say that is not a great sign of growth.

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.

L'azurde Company for Jewelry isn't a huge company, given its market capitalisation of ر.س970m. That makes it extra important to check on its balance sheet strength.

Are L'azurde Company for Jewelry 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. Shareholders will be pleased by the fact that insiders own L'azurde Company for Jewelry shares worth a considerable sum. As a matter of fact, their holding is valued at ر.س109m. This considerable investment should help drive long-term value in the business. As a percentage, this totals to 11% of the shares on issue for the business, an appreciable amount considering the market cap.

Does L'azurde Company for Jewelry Deserve A Spot On Your Watchlist?

L'azurde Company for Jewelry's earnings have taken off in quite an impressive fashion. 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. So based on this quick analysis, we do think it's worth considering L'azurde Company for Jewelry for a spot on your watchlist. Don't forget that there may still be risks. For instance, we've identified 2 warning signs for L'azurde Company for Jewelry (1 is a bit unpleasant) you should be aware of.

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 tailored list of Saudi companies which have demonstrated growth backed by recent insider purchases.

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.