Here's Why Alf Meem Yaa for Medical Supplies and Equipment (TADAWUL:9527) Has Caught The Eye Of Investors

It's common for many investors, especially those who are inexperienced, to buy shares in companies with a good story even if these companies are loss-making. Sometimes these stories can cloud the minds of investors, leading them to invest with their emotions rather than on the merit of good company fundamentals. While a well funded company may sustain losses for years, it will need to generate a profit eventually, or else investors will move on and the company will wither away.

In contrast to all that, many investors prefer to focus on companies like Alf Meem Yaa for Medical Supplies and Equipment (TADAWUL:9527), which has not only revenues, but also profits. Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Alf Meem Yaa for Medical Supplies and Equipment with the means to add long-term value to shareholders.

View our latest analysis for Alf Meem Yaa for Medical Supplies and Equipment

Alf Meem Yaa for Medical Supplies and Equipment's Earnings Per Share Are Growing

If a company can keep growing earnings per share (EPS) long enough, its share price should eventually follow. Therefore, there are plenty of investors who like to buy shares in companies that are growing EPS. We can see that in the last three years Alf Meem Yaa for Medical Supplies and Equipment grew its EPS by 11% per year. That's a good rate of growth, if it can be sustained.

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. While we note Alf Meem Yaa for Medical Supplies and Equipment achieved similar EBIT margins to last year, revenue grew by a solid 15% to ر.س237m. That's encouraging news for the company!

The chart below shows how the company's bottom and top lines have progressed over time. For finer detail, click on the image.

Since Alf Meem Yaa for Medical Supplies and Equipment is no giant, with a market capitalisation of ر.س801m, you should definitely check its cash and debt before getting too excited about its prospects.

Are Alf Meem Yaa for Medical Supplies and Equipment Insiders Aligned With All Shareholders?

It should give investors a sense of security owning shares in a company if insiders also own shares, creating a close alignment their interests. So it is good to see that Alf Meem Yaa for Medical Supplies and Equipment insiders have a significant amount of capital invested in the stock. To be specific, they have ر.س174m worth of shares. This considerable investment should help drive long-term value in the business. As a percentage, this totals to 22% of the shares on issue for the business, an appreciable amount considering the market cap.

Does Alf Meem Yaa for Medical Supplies and Equipment Deserve A Spot On Your Watchlist?

As previously touched on, Alf Meem Yaa for Medical Supplies and Equipment is a growing business, which is encouraging. To add an extra spark to the fire, significant insider ownership in the company is another highlight. The combination definitely favoured by investors so consider keeping the company on a watchlist. We should say that we've discovered 3 warning signs for Alf Meem Yaa for Medical Supplies and Equipment (1 can't be ignored!) that you should be aware of before investing here.

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 significant insider holdings.

Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.