To answer your question, I will ask you to go back to your objective of making an investment.
My objective of investment is to find a company, in which I can stay invested for a very long term, like a decade or so and in that period see the EPS of the company consistently grow by around 10% and then flatten out, to give me an Annual Yield of at least 25%.
We have three things here:
1) Company should see the other side of the decade
2) Grow by 10% in that period (in EPS, not in Net profit/Revenues and then dilute equity!)
3) Finally, become stable.
So, when I emphasized on the importance of EPS, I was talking about point #2. And all the while, I assumed that point #1 is in place.
Now, what goes into a company to ensure its survival and growth over two economic cycles is a very interesting subject, which I will be glad to make a post about.
Regards,
Amit.
PS: Many Small Caps show promise and in the next down-cycle fizz out. This % is very high in Small Caps. Do you believe Persistent Systems can survive a decade and grow its EPS? If so why?