E.SUN Financial Holding Company (TWSE:2884) Ticks All The Boxes When It Comes To Earnings Growth

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. 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 can act like a sponge for capital - so investors should be cautious that they're not throwing good money after bad.

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 E.SUN Financial Holding Company (TWSE:2884). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide E.SUN Financial Holding Company with the means to add long-term value to shareholders.

Check out our latest analysis for E.SUN Financial Holding Company

E.SUN Financial Holding Company's Earnings Per Share Are Growing

If a company can keep growing earnings per share (EPS) long enough, its share price should eventually follow. That makes EPS growth an attractive quality for any company. We can see that in the last three years E.SUN Financial Holding Company grew its EPS by 6.6% per year. That might not be particularly high growth, but it does show that per-share earnings are moving steadily in the right direction.

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. Our analysis has highlighted that E.SUN Financial Holding Company's revenue from operations did not account for all of their revenue in the previous 12 months, so our analysis of its margins might not accurately reflect the underlying business. EBIT margins for E.SUN Financial Holding Company remained fairly unchanged over the last year, however the company should be pleased to report its revenue growth for the period of 15% to NT$68b. That's progress.

In the chart below, you can see how the company has grown earnings and revenue, over time. Click on the chart to see the exact numbers.

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

Are E.SUN Financial Holding Company Insiders Aligned With All Shareholders?

Since E.SUN Financial Holding Company has a market capitalisation of NT$458b, we wouldn't expect insiders to hold a large percentage of shares. But thanks to their investment in the company, it's pleasing to see that there are still incentives to align their actions with the shareholders. Indeed, they have a considerable amount of wealth invested in it, currently valued at NT$4.4b. We note that this amounts to 1.0% of the company, which may be small owing to the sheer size of E.SUN Financial Holding Company but it's still worth mentioning. This should still be a great incentive for management to maximise shareholder value.

Should You Add E.SUN Financial Holding Company To Your Watchlist?

One positive for E.SUN Financial Holding Company is that it is growing EPS. That's nice to see. For those who are looking for a little more than this, the high level of insider ownership enhances our enthusiasm for this growth. That combination is very appealing. So yes, we do think the stock is worth keeping an eye on. It is worth noting though that we have found 1 warning sign for E.SUN Financial Holding Company that you need to take into consideration.

While opting for stocks without growing earnings and absent insider buying can yield results, for investors valuing these key metrics, here is a carefully selected list of companies in TW with promising growth potential and insider confidence.

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.