Is Now The Time To Put Sahara International Petrochemical (TADAWUL:2310) On Your Watchlist?

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. A loss-making company is yet to prove itself with profit, and eventually the inflow of external capital may dry up.

In contrast to all that, many investors prefer to focus on companies like Sahara International Petrochemical (TADAWUL:2310), 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 Sahara International Petrochemical with the means to add long-term value to shareholders.

View our latest analysis for Sahara International Petrochemical

How Fast Is Sahara International Petrochemical Growing Its Earnings Per Share?

In the last three years Sahara International Petrochemical'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. As a result, we'll zoom in on growth over the last year, instead. Outstandingly, Sahara International Petrochemical's EPS shot from ر.س3.57 to ر.س6.10, over the last year. It's not often a company can achieve year-on-year growth of 71%. That could be a sign that the business has reached a true inflection point.

It's often helpful to take a look at earnings before interest and tax (EBIT) margins, as well as revenue growth, to get another take on the quality of the company's growth. Sahara International Petrochemical shareholders can take confidence from the fact that EBIT margins are up from 39% to 42%, and revenue is growing. Ticking those two boxes is a good sign of growth, in our book.

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.

The trick, as an investor, is to find companies that are going to perform well in the future, not just in the past. While crystal balls don't exist, you can check our visualization of consensus analyst forecasts for Sahara International Petrochemical's future EPS 100% free.

Are Sahara International Petrochemical Insiders Aligned With All Shareholders?

We would not expect to see insiders owning a large percentage of a ر.س28b company like Sahara International Petrochemical. But we are reassured by the fact they have invested in the company. We note that their impressive stake in the company is worth ر.س619m. This suggests that leadership will be very mindful of shareholders' interests when making decisions!

Is Sahara International Petrochemical Worth Keeping An Eye On?

Sahara International Petrochemical's earnings per share growth have been climbing higher at an appreciable rate. This level of EPS growth does wonders for attracting investment, and the large insider investment in the company is just the cherry on top. The hope is, of course, that the strong growth marks a fundamental improvement in the business economics. So based on this quick analysis, we do think it's worth considering Sahara International Petrochemical for a spot on your watchlist. You still need to take note of risks, for example - Sahara International Petrochemical has 2 warning signs (and 1 which is significant) we think you should know about.

Although Sahara International Petrochemical certainly looks good, it may appeal to more investors if insiders were buying up shares. If you like to see insider buying, 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.