If EPS Growth Is Important To You, Aldrees Petroleum and Transport Services (TADAWUL:4200) Presents An Opportunity


The excitement of investing in a company that can reverse its fortunes is a big draw for some speculators, so even companies that have no revenue, no profit, and a record of falling short, can manage to find investors. 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 are always racing against time to achieve financial sustainability, so investors in these companies may be taking on more risk than they should.

Despite being in the age of tech-stock blue-sky investing, many investors still adopt a more traditional strategy; buying shares in profitable companies like Aldrees Petroleum and Transport Services (TADAWUL:4200). Now this is not to say that the company presents the best investment opportunity around, but profitability is a key component to success in business.

View our latest analysis for Aldrees Petroleum and Transport Services

Aldrees Petroleum and Transport Services’ 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. To the delight of shareholders, Aldrees Petroleum and Transport Services has achieved impressive annual EPS growth of 40%, compound, over the last three years. While that sort of growth rate is not sustainable for long, it certainly catches the eye of prospective investors.

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. While we note Aldrees Petroleum and Transport Services achieved similar EBIT margins last year, revenue grew by a solid 63% to ر.س11b. That’s the real positive.

You can take a look at the company’s revenue and earnings growth trend, in the chart below. For finer detail, click on the image.

SASE:4200 Earnings and Revenue History September 26th 2022

In investing, as in life, the future matters more than the past. So why not check out this free interactive visualization of Aldrees Petroleum and Transport Services’ forecast profits?

Are Aldrees Petroleum and Transport Services 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 of their interests. Shareholders will be pleased by the fact that insiders own Aldrees Petroleum and Transport Services shares worth a considerable sum. Holding ر.س188m worth of stock in the company is no laughing matter and insiders will be committed in delivering the best outcomes for shareholders. That’s certainly enough to let shareholders know that management will be very focussed on long term growth.

Does Aldrees Petroleum and Transport Services Deserve A Spot On Your Watchlist?

Aldrees Petroleum and Transport Services’ earnings per share growth have been climbing higher at an appreciable rate. That sort of growth is nothing short of eye-catching, and the large investment held by insiders should certainly brighten the view of the company. 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 at the surface level, Aldrees Petroleum and Transport Services is worth putting on your watchlist; after all, shareholders do well when the market underestimates fast growing companies. We should say that we’ve discovered 1 warning sign for Aldrees Petroleum and Transport Services 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 of not there are insiders buying shares. But for those who consider these important metrics, we encourage you to check out companies that of have those features. You can access the free list of them here.

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

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.

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