It is only natural that many investors, especially those new to the game, would rather buy “hot” stocks with a good story, even if those companies are losing money. But the reality is that when a business loses money every year, for long enough, its investors will usually take their share of those losses.

In the age of investing in the blue sky of tech stocks, my choice may seem old-fashioned; I always prefer profitable businesses like Islamic Bank of Qatar (QPSC) (DSM: QIBK). Now, I’m not saying the stock is necessarily undervalued today; but I cannot shake the appreciation of the profitability of the company itself. In comparison, loss-making companies act like a sponge for capital – but unlike such a sponge, they don’t always produce something when in a hurry.

Check out our latest analysis for Qatar Islamic Bank (QPSC)

How fast is Qatar Islamic Bank (QPSC) increasing earnings per share?

If you think the markets are even vaguely efficient, then in the long run you would expect a company’s stock price to follow its earnings per share (EPS). This means that growing EPS is seen as a real benefit by most successful long-term investors. We can see that over the past three years, Qatar Islamic Bank (QPSC) has increased its EPS by 8.6% per year. It’s a good rate of growth, if it can be sustained.

I like to look at earnings before interest and tax margins (EBIT), as well as revenue growth, to get another idea of ​​how well the business is growing. All Qatar Islamic Bank (QPSC) income this year is not income operationsSo keep in mind that the revenue and margin numbers I used might not be the best representation of the underlying business. Qatar Islamic Bank (QPSC) ‘s EBIT margins are stable, but worryingly, its revenues are actually declining. Suffice it to say, this is not a great sign of growth.

The graph below shows how the company’s bottom line has progressed over time. For more details, click on the image.

As we live in the present moment all the time, there is no doubt in my mind that the future matters more than the past. So why not check out this interactive graph showing future EPS estimates for Qatar Islamic Bank (QPSC)?

Are Qatar Islamic Bank (QPSC) Insiders Aligned With All Shareholders?

Since Qatar Islamic Bank (QPSC) has a market cap of ر.ق 43b, we don’t expect insiders to own a large percentage of stocks. But we are reassured by the fact that they are investors in the company. Indeed, they have invested a sparkling mountain of wealth, currently valued at ر.ق 5.5 b. With 13% of the activity, this participation gives insiders a lot of influence and many reasons to generate value for shareholders. Very encouraging.

Is the Islamic Bank of Qatar (QPSC) worth watching?

A positive point for the Qatar Islamic Bank (QPSC) is that it is increasing its EPS. It’s nice to see. If that’s not enough, there are also the fairly noticeable levels of insider ownership. The combination brings joy to me, so I would consider keeping the company on a watch list. However, be aware that the Qatar Islamic Bank (QPSC) shows 1 warning sign in our investment analysis , you must know…

Of course, you can (sometimes) buy stocks that are not growing income and not have insiders who buy stocks. But as a growth investor, I always like to check out companies that to do have these characteristics. You can access a free list of them here.

Please note that the insider trading discussed in this article refers to reportable trades in the relevant jurisdiction.

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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in the mentioned stocks.
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