Investors are often guided by the idea of discovering ‘the next big thing’, even if that means buying ‘story stocks’ without any revenue, let alone profit. But as Peter Lynch said in One Up On Wall Street, ‘Long shots almost never pay off.’ 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 Qatar International Islamic Bank (Q.P.S.C) (DSM:QIIK). 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.

View our latest analysis for Qatar International Islamic Bank (Q.P.S.C)

How Fast Is Qatar International Islamic Bank (Q.P.S.C) Growing?

If a company can keep growing earnings per share (EPS) long enough, its share price should eventually follow. That means EPS growth is considered a real positive by most successful long-term investors. Over the last three years, Qatar International Islamic Bank (Q.P.S.C) has grown EPS by 8.5% per year. That growth rate is fairly good, assuming the company can keep it up.

It’s often helpful to take a look at earnings before interest and tax (EBIT) margins, as well as revenue growth, to get another take on the quality of the company’s growth. Not all of Qatar International Islamic Bank (Q.P.S.C)’s revenue this year is revenue from operations, so keep in mind the revenue and margin numbers used in this article might not be the best representation of the underlying business. EBIT margins for Qatar International Islamic Bank (Q.P.S.C) remained fairly unchanged over the last year, however the company should be pleased to report its revenue growth for the period of 22% to ر.ق3.5b. That’s progress.

You can take a look at the company’s revenue and earnings growth trend, in the chart below. Click on the chart to see the exact numbers.

You don’t drive with your eyes on the rear-view mirror, so you might be more interested in this free report showing analyst forecasts for Qatar International Islamic Bank (Q.P.S.C)’s future profits.

Are Qatar International Islamic Bank (Q.P.S.C) Insiders Aligned With All Shareholders?

It’s a necessity that company leaders act in the best interest of shareholders and so insider investment always comes as a reassurance to the market. So it is good to see that Qatar International Islamic Bank (Q.P.S.C) insiders have a significant amount of capital invested in the stock. Indeed, they have a considerable amount of wealth invested in it, currently valued at ر.ق578m. Holders should find this level of insider commitment quite encouraging, since it would ensure that the leaders of the company would also experience their success, or failure, with the stock.

Does Qatar International Islamic Bank (Q.P.S.C) Deserve A Spot On Your Watchlist?

As previously touched on, Qatar International Islamic Bank (Q.P.S.C) is a growing business, which is encouraging. 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 Qatar International Islamic Bank (Q.P.S.C) that you need to take into consideration.

Although Qatar International Islamic Bank (Q.P.S.C) certainly looks good, it may appeal to more investors if insiders were buying up shares. If you like to see companies with more skin in the game, then check out this handpicked selection of Qatari companies that not only boast of strong growth but have strong insider backing.

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.