We Ran A Stock Scan For Earnings Growth And Stefanutti Stocks Holdings (JSE:SSK) Passed With Ease

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 reach financial sustainability, so investors in these companies may be taking on more risk than they should.

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 Stefanutti Stocks Holdings (JSE:SSK). 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.

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How Fast Is Stefanutti Stocks Holdings Growing Its Earnings Per Share?

In business, profits are a key measure of success; and share prices tend to reflect earnings per share (EPS) performance. So a growing EPS generally brings attention to a company in the eyes of prospective investors. It's an outstanding feat for Stefanutti Stocks Holdings to have grown EPS from R0.15 to R1.25 in just one year. While it's difficult to sustain growth at that level, it bodes well for the company's outlook for the future.

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. The music to the ears of Stefanutti Stocks Holdings shareholders is that EBIT margins have grown from 2.1% to 99% in the last 12 months and revenues are on an upwards trend as well. Ticking those two boxes is a good sign of growth, in our book.

You can take a look at the company's revenue and earnings growth trend, in the chart below. To see the actual numbers, click on the chart.

View our latest analysis for Stefanutti Stocks Holdings

Stefanutti Stocks Holdings isn't a huge company, given its market capitalisation of R644m. That makes it extra important to check on its balance sheet strength.

Are Stefanutti Stocks Holdings Insiders Aligned With All Shareholders?

It's said that there's no smoke without fire. For investors, insider buying is often the smoke that indicates which stocks could set the market alight. This view is based on the possibility that stock purchases signal bullishness on behalf of the buyer. However, small purchases are not always indicative of conviction, and insiders don't always get it right.

Shareholders in Stefanutti Stocks Holdings will be more than happy to see insiders committing themselves to the company, spending R8.9m on shares in just twelve months. This, combined with the lack of sales from insiders, should be a great signal for shareholders in what's to come. It is also worth noting that it was CEO & Executive Director Russell Crawford who made the biggest single purchase, worth R4.4m, paying R3.05 per share.

Does Stefanutti Stocks Holdings Deserve A Spot On Your Watchlist?

Stefanutti Stocks Holdings' earnings per share growth have been climbing higher at an appreciable rate. Growth-minded people will be intrigued by the incredible movement in EPS growth. And may very well signal a significant inflection point for the business. If that's the case, you may regret neglecting to put Stefanutti Stocks Holdings on your watchlist. We should say that we've discovered 2 warning signs for Stefanutti Stocks Holdings that you should be aware of before investing here.

Keen growth investors love to see insider activity. Thankfully, Stefanutti Stocks Holdings isn't the only one. You can see a a curated list of South African companies which have exhibited consistent growth accompanied by high insider ownership.

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.