Here's Why We Think National Gas and Industrialization (TADAWUL:2080) Is Well Worth Watching

GASCO -3.13%

GASCO

2080.SA

83.70

-3.13%

For beginners, it can seem like a good idea (and an exciting prospect) to buy a company that tells a good story to investors, even if it currently lacks a track record of revenue and 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. While a well funded company may sustain losses for years, it will need to generate a profit eventually, or else investors will move on and the company will wither away.

So if this idea of high risk and high reward doesn't suit, you might be more interested in profitable, growing companies, like National Gas and Industrialization (TADAWUL:2080). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide National Gas and Industrialization with the means to add long-term value to shareholders.

Check out our latest analysis for National Gas and Industrialization

How Fast Is National Gas and Industrialization Growing Its Earnings Per Share?

Over the last three years, National Gas and Industrialization has grown earnings per share (EPS) at as impressive rate from a relatively low point, resulting in a three year percentage growth rate that isn't particularly indicative of expected future performance. As a result, we'll zoom in on growth over the last year, instead. National Gas and Industrialization's EPS has risen over the last 12 months, growing from ر.س2.71 to ر.س3.19. There's little doubt shareholders would be happy with that 18% gain.

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. EBIT margins for National Gas and Industrialization remained fairly unchanged over the last year, however the company should be pleased to report its revenue growth for the period of 19% to ر.س2.4b. That's progress.

In the chart below, you can see how the company has grown earnings and revenue, over time. To see the actual numbers, click on the chart.

earnings-and-revenue-history
SASE:2080 Earnings and Revenue History December 29th 2023

While it's always good to see growing profits, you should always remember that a weak balance sheet could come back to bite. So check National Gas and Industrialization's balance sheet strength, before getting too excited.

Are National Gas and Industrialization Insiders Aligned With All Shareholders?

It's pleasing to see company leaders with putting their money on the line, so to speak, because it increases alignment of incentives between the people running the business, and its true owners. Shareholders will be pleased by the fact that insiders own National Gas and Industrialization shares worth a considerable sum. Holding ر.س336m worth of stock in the company is no laughing matter and insiders will be committed in delivering the best outcomes for shareholders. This should keep them focused on creating long term value for shareholders.

Does National Gas and Industrialization Deserve A Spot On Your Watchlist?

One positive for National Gas and Industrialization is that it is growing EPS. That's nice to see. If that's not enough on its own, there is also the rather notable levels of insider ownership. That combination is very appealing. So yes, we do think the stock is worth keeping an eye on. It's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with National Gas and Industrialization , and understanding it should be part of your investment process.

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 SA 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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