Investors are often guided by the idea of discovering the “next big thing.” Even if that means buying “story stocks” that don't yield any returns, let alone profits. But as Peter Lynch said, One Up on Wall Street, “Long shots rarely pay off.” Although cash-rich companies may suffer losses for years, they must eventually generate profits. Otherwise, investors will move on and the company will decline.
Despite the era of blue-sky investing in tech stocks, many investors still employ traditional strategies.Buy shares in profitable companies such as APM Automotive Holdings Berhad (KLSE:APM). This doesn't necessarily indicate whether it's undervalued or not, but the profitability of the business is enough to justify some valuation, especially if it's growing.
See our latest analysis for APM Automotive Holdings Berhad.
APM Automotive Holdings Berhad’s profitability improvement
Over the past three years, APM Automotive Holdings Berhad's earnings per share have increased. So it's a bit disingenuous to use these numbers to try to derive long-term estimates. As a result, we will instead focus on last year's growth. APM Automotive Holdings Berhad's EPS surged from MYR 0.18 to MYR 0.24. We should be able to achieve a result that satisfies shareholders. That's a staggering 34% increase.
Revenue growth is a good indicator that growth is sustainable and, when combined with high earnings before interest and tax (EBIT) margins, can help a company maintain a competitive advantage in the market. This is an excellent method. APM Automotive Holdings Berhad maintained stable EBIT margins last year while growing its revenue by 14% to RM1.9 billion. That's a really positive thing.
The graph below shows how the company's revenue and revenue have trended over time. Click on the image for more details.
APM Automotive Holdings Berhad isn't a huge company, with a market capitalization of RM573m, so you should always check its cash and debt. in front Too excited about the prospect.
Are APM Automotive Holdings' insiders aligned with all shareholders?
Insider investing is always reassuring to the market, as it requires company leaders to act in the best interests of shareholders. Shareholders will be pleased with the fact that insiders own a significant amount of APM Automotive Holdings Berhad stock. In fact, their holdings are valued at RM138 million. This significant investment should help increase the long-term value of the business. These holdings account for more than 24% of the company. Skin visible in-game.
Is APM Automotive Holdings Berhad worth putting on your watchlist?
For growth stock investors, APM Automotive Holdings Berhad's earnings growth is a beacon. Furthermore, the high level of insider ownership is impressive, suggesting management values the EPS growth and believes in APM Automotive Holdings Berhad's continued strength. . Adding up its merits, his solid EPS growth and company insiders in sync with shareholders would suggest it's a business worth further research. For example, APM Automotive Holdings Berhad should be aware of the following risks: two warning signs (And the one we don't like very much) we think you should know about.
While picking stocks with low earnings growth and no insider buying can still yield results, we recommend that you consider promising growth potential and insider confidence for investors who value these important metrics. Below is a hand-picked list of companies in My State with .
Please note that 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 using only unbiased methodologies, based on historical data and analyst forecasts, and articles are not intended to be financial advice. This is not a recommendation to buy or sell any stock, and does not take into account your objectives or financial situation. We aim to provide long-term, focused analysis based on fundamental data. Note that our analysis may not factor in the latest announcements or qualitative material from price-sensitive companies. Simply Wall St has no position in any stocks mentioned.
