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. Sometimes these stories can cloud the minds of investors, leading them to invest with their emotions rather than on the merit of good company fundamentals. 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.

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 BCI Minerals (ASX:BCI). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide BCI Minerals with the means to add long-term value to shareholders.

See our latest analysis for BCI Minerals

BCI Minerals' Improving Profits

Even when EPS earnings per share (EPS) growth is unexceptional, company value can be created if this rate is sustained each year. So it's easy to see why many investors focus in on EPS growth. Outstandingly, BCI Minerals' EPS shot from AU$0.0076 to AU$0.014, over the last year. It's a rarity to see 80% year-on-year growth like that. That could be a sign that the business has reached a true inflection point.

Top-line growth is a great indicator that growth is sustainable, and combined with a high earnings before interest and taxation (EBIT) margin, it's a great way for a company to maintain a competitive advantage in the market. The music to the ears of BCI Minerals shareholders is that EBIT margins have grown from -6.6% to 11% in the last 12 months and revenues are on an upwards trend as well. That's great to see, on both counts.

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. earnings-and-revenue-history

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 BCI Minerals.



Are BCI Minerals Insiders Aligned With All Shareholders?

Insider interest in a company always sparks a bit of intrigue and many investors are on the lookout for companies where insiders are putting their money where their mouth is. Because often, the purchase of stock is a sign that the buyer views it as undervalued. However, insiders are sometimes wrong, and we don't know the exact thinking behind their acquisitions.

The good news for BCI Minerals shareholders is that no insiders reported selling shares in the last year. Add in the fact that Brian O'Donnell, the Non-Executive Chairman of the company, paid AU$27k for shares at around AU$0.37 each. It seems that at least one insider is prepared to show the market there is potential within BCI Minerals.

Should You Add BCI Minerals To Your Watchlist?

BCI Minerals' earnings per share growth have been climbing higher at an appreciable rate. Growth investors should find it difficult to look past that strong EPS move. And may very well signal a significant inflection point for the business. If that's the case, you may regret neglecting to put BCI Minerals on your watchlist. It's still necessary to consider the ever-present spectre of investment risk.  We've identified 3 warning signs  with BCI Minerals (at least 2 which are concerning)  , and understanding them should be part of your investment process.

There are plenty of other companies that have insiders buying up shares. So if you like the sound of BCI Minerals, you'll probably love this freelist of growing companies that insiders are buying.

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.