Like a puppy chasing its tail, some new investors are often looking for “the next big thing,” even if that means buying “history stocks” with no revenue, let alone profit. And in their study titled Who falls prey to the wolf of Wall Street? » Leuz and. al. found that it is “fairly common” for investors to lose money by buying into “pump and dump” schemes.
If, on the other hand, you like businesses that generate revenue and even profit, then you might be interested in Gender Electrical infrastructure (NSE: GENUSPOWER). While that doesn’t make stocks worth buying at any price, you can’t deny that successful capitalism ultimately requires profits. In comparison, loss-making companies act like a sponge for capital – but unlike such a sponge, they don’t always produce something when pressed.
Check out our latest analysis for Genus Power Infrastructures
How fast is Genus Power Infrastructures growing earnings per share?
As one of my mentors once told me, stock price follows earnings per share (EPS). This means EPS growth is seen as a real benefit by most successful long-term investors. We can see that over the past three years, Genus Power Infrastructures has grown its EPS by 4.2% per year. This may not be particularly high growth, but it shows that earnings per share are steadily moving in the right direction.
One way to check a company’s growth is to look at the evolution of its revenues and its earnings before interest and taxes (EBIT) margins. On the one hand, Genus Power Infrastructures’ EBIT margins have fallen over the past year, but on the other hand, revenues have increased. So if EBIT margins can stabilize, this top line growth should pay off for shareholders.
You can check the company’s revenue and profit growth trend in the table below. For more details, click on the image.
Genus Power Infrastructures is not a big company, considering its market capitalization of ₹18 billion. It is therefore very important to check the strength of its balance sheet.
Are Genus Power Infrastructures insiders aligned with all shareholders?
Many consider high insider shareholding to be a strong sign of alignment between a company’s executives and ordinary shareholders. We are therefore pleased to report that Genus Power Infrastructures insiders own a significant share of the company. In fact, with 46% of the company to their name, insiders are deeply invested in the company. I’m always reassured by strong insider ownership like this, because it implies that those running the company are genuinely motivated to create shareholder value. With this type of holding, insiders have approximately ₹8.4 billion in the share, at current prices. That should be more than enough to keep them focused on creating shareholder value!
Should you add Genus Electrical Infrastructure to your watch list?
An important and encouraging feature of Genus Power Infrastructures is that it increases its profits. Just as polish makes silverware stand out, the high level of insider ownership enhances my enthusiasm for this growth. The combination sparks joy for me, so I would consider keeping the company on a watch list. Before proceeding to the next step, you must know the 1 warning sign for Genus Power Infrastructures that we discovered.
While Genus Power Infrastructures certainly looks good to me, I would rather have insiders buying stocks. If you also like to see insiders buy, then this free list of growing companies that insiders are buying might be exactly what you’re looking for.
Please note that insider trading discussed in this article refers to reportable trading in the relevant jurisdiction.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.