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. 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.

So if this idea of high risk and high reward doesn't suit, you might be more interested in profitable, growing companies, like Jiangxi Xinyu Guoke Technology (SZSE:300722). While this doesn't necessarily speak to whether it's undervalued, the profitability of the business is enough to warrant some appreciation - especially if its growing.

See our latest analysis for Jiangxi Xinyu Guoke Technology

How Fast Is Jiangxi Xinyu Guoke Technology Growing Its Earnings Per Share?

Even when EPS earnings per share (EPS) growth is unexceptional, company value can be created if this rate is sustained each year. So EPS growth can certainly encourage an investor to take note of a stock. Jiangxi Xinyu Guoke Technology's EPS skyrocketed from CN¥0.30 to CN¥0.37, in just one year; a result that's bound to bring a smile to shareholders. That's a impressive gain of 26%.

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. Our analysis has highlighted that Jiangxi Xinyu Guoke Technology's revenue from operations did not account for all of their revenue last year, so our analysis of its margins might not accurately reflect the underlying business. Jiangxi Xinyu Guoke Technology maintained stable EBIT margins over the last year, all while growing revenue 25% to CN¥337m. That's progress.

The chart below shows how the company's bottom and top lines have progressed over time. To see the actual numbers, click on the chart.

While profitability drives the upside, prudent investors always check the balance sheet, too.

Are Jiangxi Xinyu Guoke Technology Insiders Aligned With All Shareholders?

It's a necessity that company leaders act in the best interest of shareholders and so insider investment always comes as a reassurance to the market. Jiangxi Xinyu Guoke Technology followers will find comfort in knowing that insiders have a significant amount of capital that aligns their best interests with the wider shareholder group. Indeed, they hold CN¥124m worth of its stock. That shows significant buy-in, and may indicate conviction in the business strategy. Despite being just 2.3% of the company, the value of that investment is enough to show insiders have plenty riding on the venture.

Is Jiangxi Xinyu Guoke Technology Worth Keeping An Eye On?

If you believe that share price follows earnings per share you should definitely be delving further into Jiangxi Xinyu Guoke Technology's strong EPS growth. With EPS growth rates like that, it's hardly surprising to see company higher-ups place confidence in the company through continuing to hold a significant investment. On the balance of its merits, solid EPS growth and company insiders who are aligned with the shareholders would indicate a business that is worthy of further research. Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Jiangxi Xinyu Guoke Technology that you should be aware of.

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 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.