Investors are often guided by the idea of discovering 'the next big thing', even if that means buying 'story stocks' without any revenue, let alone profit. 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. A loss-making company is yet to prove itself with profit, and eventually the inflow of external capital may dry up.

If this kind of company isn't your style, you like companies that generate revenue, and even earn profits, then you may well be interested in Zhejiang Jingsheng Mechanical & Electrical (SZSE:300316). 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.

Check out our latest analysis for Zhejiang Jingsheng Mechanical & Electrical

How Fast Is Zhejiang Jingsheng Mechanical & Electrical Growing Its Earnings Per Share?

Zhejiang Jingsheng Mechanical & Electrical has undergone a massive growth in earnings per share over the last three years. So much so that this three year growth rate wouldn't be a fair assessment of the company's future. As a result, we'll zoom in on growth over the last year, instead. Zhejiang Jingsheng Mechanical & Electrical's EPS skyrocketed from CN¥2.03 to CN¥3.39, in just one year; a result that's bound to bring a smile to shareholders. That's a commendable gain of 67%.

Careful consideration of revenue growth and earnings before interest and taxation (EBIT) margins can help inform a view on the sustainability of the recent profit growth. Not all of Zhejiang Jingsheng Mechanical & Electrical's revenue this year is revenue from operations, so keep in mind the revenue and margin numbers used in this article might not be the best representation of the underlying business. While we note Zhejiang Jingsheng Mechanical & Electrical achieved similar EBIT margins to last year, revenue grew by a solid 76% to CN¥17b. That's progress.

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.

Of course the knack is to find stocks that have their best days in the future, not in the past. You could base your opinion on past performance, of course, but you may also want to check this interactive graph of professional analyst EPS forecasts for Zhejiang Jingsheng Mechanical & Electrical.

Are Zhejiang Jingsheng Mechanical & Electrical Insiders Aligned With All Shareholders?

Owing to the size of Zhejiang Jingsheng Mechanical & Electrical, we wouldn't expect insiders to hold a significant proportion of the company. But we do take comfort from the fact that they are investors in the company. Indeed, they have a considerable amount of wealth invested in it, currently valued at CN¥4.5b. Investors will appreciate management having this amount of skin in the game as it shows their commitment to the company's future.

Is Zhejiang Jingsheng Mechanical & Electrical Worth Keeping An Eye On?

You can't deny that Zhejiang Jingsheng Mechanical & Electrical has grown its earnings per share at a very impressive rate. That's attractive. Further, the high level of insider ownership is impressive and suggests that the management appreciates the EPS growth and has faith in Zhejiang Jingsheng Mechanical & Electrical's continuing strength. Fast growth and confident insiders should be enough to warrant further research, so it would seem that it's a good stock to follow. Still, you should learn about the 2 warning signs we've spotted with Zhejiang Jingsheng Mechanical & Electrical (including 1 which is a bit concerning).

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.