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 China Merchants Expressway Network & Technology HoldingsLtd (SZSE:001965). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide China Merchants Expressway Network & Technology HoldingsLtd with the means to add long-term value to shareholders.

How Fast Is China Merchants Expressway Network & Technology HoldingsLtd Growing?

If you believe that markets are even vaguely efficient, then over the long term you'd expect a company's share price to follow its earnings per share (EPS) outcomes. That makes EPS growth an attractive quality for any company. We can see that in the last three years China Merchants Expressway Network & Technology HoldingsLtd grew its EPS by 7.7% per year. While that sort of growth rate isn't anything to write home about, it does show the business is growing.

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. China Merchants Expressway Network & Technology HoldingsLtd maintained stable EBIT margins over the last year, all while growing revenue 31% to CN¥12b. That's a real positive.

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.

In investing, as in life, the future matters more than the past. So why not check out this free interactive visualization of China Merchants Expressway Network & Technology HoldingsLtd's forecast profits?

Are China Merchants Expressway Network & Technology HoldingsLtd Insiders Aligned With All Shareholders?

It's a good habit to check into a company's remuneration policies to ensure that the CEO and management team aren't putting their own interests before that of the shareholder with excessive salary packages. For companies with market capitalisations over CN¥58b, like China Merchants Expressway Network & Technology HoldingsLtd, the median CEO pay is around CN¥2.7m.

The China Merchants Expressway Network & Technology HoldingsLtd CEO received CN¥1.8m in compensation for the year ending December 2023. That comes in below the average for similar sized companies and seems pretty reasonable. CEO compensation is hardly the most important aspect of a company to consider, but when it's reasonable, that gives a little more confidence that leadership are looking out for shareholder interests. It can also be a sign of a culture of integrity, in a broader sense.

Does China Merchants Expressway Network & Technology HoldingsLtd Deserve A Spot On Your Watchlist?

One positive for China Merchants Expressway Network & Technology HoldingsLtd is that it is growing EPS. That's nice to see. To add to this, the modest CEO compensation should tell investors that the directors have an active interest in delivering the best for shareholders. So all in all China Merchants Expressway Network & Technology HoldingsLtd is worthy at least considering for your watchlist. You still need to take note of risks, for example - China Merchants Expressway Network & Technology HoldingsLtd has 3 warning signs (and 1 which is concerning) we think you should know about.

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 CN 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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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.