Yahoo Finance Here's Why We Think Leong Hup International Berhad (KLSE:LHI) Might Deserve Your Attention Today
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. Unfortunately, these high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson. A loss-making company is yet to prove itself with profit, and eventually the inflow of external capital may dry up.
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 Leong Hup International Berhad (KLSE:LHI). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Leong Hup International Berhad with the means to add long-term value to shareholders.
See our latest analysis for Leong Hup International Berhad
How Fast Is Leong Hup International Berhad Growing?
Generally, companies experiencing growth in earnings per share (EPS) should see similar trends in share price. That makes EPS growth an attractive quality for any company. Leong Hup International Berhad's shareholders have have plenty to be happy about as their annual EPS growth for the last 3 years was 51%. Growth that fast may well be fleeting, but it should be more than enough to pique the interest of the wary stock pickers.
One way to double-check a company's growth is to look at how its revenue, and earnings before interest and tax (EBIT) margins are changing. Leong Hup International Berhad shareholders can take confidence from the fact that EBIT margins are up from 4.0% to 6.9%, and revenue is growing. Both of which are great metrics to check off for potential growth.
You can take a look at the company's revenue and earnings growth trend, in the chart below. For finer detail, click on the image.
While we live in the present moment, there's little doubt that the future matters most in the investment decision process. So why not check this interactive chart depicting future EPS estimates, for Leong Hup International Berhad?
Are Leong Hup International Berhad 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 Leong Hup International Berhad insiders have a significant amount of capital invested in the stock. As a matter of fact, their holding is valued at RM169m. That's a lot of money, and no small incentive to work hard. Those holdings account for over 8.5% of the company; visible skin in the game.
Should You Add Leong Hup International Berhad To Your Watchlist?
Leong Hup International Berhad's earnings per share growth have been climbing higher at an appreciable rate. This level of EPS growth does wonders for attracting investment, and the large insider investment in the company is just the cherry on top. At times fast EPS growth is a sign the business has reached an inflection point, so there's a potential opportunity to be had here. Based on the sum of its parts, we definitely think its worth watching Leong Hup International Berhad very closely. Even so, be aware that Leong Hup International Berhad is showing 3 warning signs in our investment analysis , and 1 of those shouldn't be ignored...
There's always the possibility of doing well buying stocks that are not growing earnings and do not have insiders buying shares. But for those who consider these important metrics, we encourage you to check out companies that do have those features. You can access a tailored list of Malaysian companies which have demonstrated growth backed by recent insider purchases.
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.
