If EPS Growth Is Important To You, MINISO Group Holding (NYSE:MNSO) Presents An Opportunity

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. But the reality is that when a company loses money each year, for long enough, its investors will usually take their share of those losses. 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.

In contrast to all that, many investors prefer to focus on companies like MINISO Group Holding (NYSE:MNSO), which has not only revenues, but also profits. While profit isn't the sole metric that should be considered when investing, it's worth recognising businesses that can consistently produce it.

Check out our latest analysis for MINISO Group Holding

How Fast Is MINISO Group Holding Growing Its Earnings Per Share?

Over the last three years, MINISO Group Holding has grown earnings per share (EPS) at as impressive rate from a relatively low point, resulting in a three year percentage growth rate that isn't particularly indicative of expected future performance. Thus, it makes sense to focus on more recent growth rates, instead. In impressive fashion, MINISO Group Holding's EPS grew from CN¥1.90 to CN¥3.37, over the previous 12 months. Year on year growth of 78% 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. Unfortunately, MINISO Group Holding's revenue dropped 2.0% last year, but the silver lining is that EBIT margins improved from 8.0% to 13%. That falls short of ideal.

In the chart below, you can see how the company has grown earnings and revenue, over time. For finer detail, click on the image.

In investing, as in life, the future matters more than the past. So why not check out this free interactive visualization of MINISO Group Holding's forecast profits?

Are MINISO Group Holding Insiders Aligned With All Shareholders?

It's said that there's no smoke without fire. For investors, insider buying is often the smoke that indicates which stocks could set the market alight. This view is based on the possibility that stock purchases signal bullishness on behalf of the buyer. However, insiders are sometimes wrong, and we don't know the exact thinking behind their acquisitions.

Over the preceding 12 months, we see that company insiders sold CN¥96k worth of MINISO Group Holding stock. On a brighter note, we see that Founder Guofu Ye paid CN¥126k for shares, at an average acquisition price of CN¥5.25 per share. And that's a reason to be optimistic.

On top of the insider buying, we can also see that MINISO Group Holding insiders own a large chunk of the company. Indeed, with a collective holding of 71%, company insiders are in control and have plenty of capital behind the venture. This makes it apparent they will be incentivised to plan for the long term - a positive for shareholders with a sit and hold strategy. This insider holding amounts to That level of investment from insiders is nothing to sneeze at.

Is MINISO Group Holding Worth Keeping An Eye On?

MINISO Group Holding's earnings have taken off in quite an impressive fashion. The icing on the cake is that insiders own a large chunk of the company and one has even been buying more shares. These factors seem to indicate the company's potential and that it has reached an inflection point. We'd suggest MINISO Group Holding belongs near the top of your watchlist. You still need to take note of risks, for example - MINISO Group Holding has 2 warning signs we think you should be aware of.

Keen growth investors love to see insider buying. Thankfully, MINISO Group Holding isn't the only one. You can see a 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.