For the uninitiated, buying a company that has a good story to tell investors, even if it doesn't currently have a track record of revenue or profits, might seem like a good idea (and an exciting prospect). But as Peter Lynch puts it, One Up on Wall Street“Long-term investments rarely pay off.” Unprofitable companies can act as a sponge, so investors need to be careful not to dump money into them.
So if this high-risk, high-reward mentality doesn't suit you, you might be interested in some profitable growing companies, like these: GREATEC TECHNOLOGY (KLSE:GREATEC). We are not saying that this company offers the best investment opportunities, but profitability is an important factor for a successful business.
View our latest analysis for Greatech Technology Berhad.
How fast is Greatech Technology Berhad growing?
If a company can continue to grow its earnings per share (EPS) over time, the stock price should eventually follow. Therefore, it makes sense for experienced investors to pay close attention to a company's EPS when doing investment research. It's certainly pleasing to see that Greatech Technology Berhad has grown his EPS by 21% per year over his three years. Shareholders will be very happy if this kind of growth continues.
To reassess the quality of a company's growth, it's often useful to look at its earnings before interest and tax (EBIT) margin, as well as its revenue growth. Although Greatech Technology Berhad's EBIT margin was roughly unchanged from last year, the company is pleased to see that its revenue for the period increased by 21% to RM659m. That's a really positive thing.
The graph below depicts how the company's earnings and revenue have trended over time, and you can click on the chart to see the actual numbers.
The trick, of course, is to find stocks whose best days are in the future, not in the past. Of course you could form your opinion based on past performance, but you might also want to check out this interactive chart of his EPS forecast, made by expert analysts at Greatech Technology Berhad.
Are Greatech Technology Berhad insiders aligned with all shareholders?
It's essential that company leaders have shareholder interests at heart, so insider investing is always reassuring to the market. Shareholders will be pleased to see that the insider owns a significant amount of his Greatech Technology Berhad shares. In fact, their holdings are valued at RM68 million. This indicates significant investment and may indicate confidence in the business strategy. Despite being just 1.1% of the company, the investment amount is enough to show that insiders have high expectations for this venture.
It's great to have insiders invested in the business, but shareholders may be wondering if the remuneration policy is in their interest, and based on the CEO's remuneration, they would certainly argue that it is.For a company with a market capitalization between RM4.7b and RM15b, like Greatech Technology Berhad, the median CEO remuneration is about RM2.2m.
Greatech Technology Berhad's CEO will receive total compensation of just RM88,000 for the year to December 2023. While this compensation could be seen as symbolic, it suggests that the CEO does not need a large amount of compensation to stay motivated. While CEO compensation levels are not the biggest driver of how a company is viewed, modest compensation is a positive as it shows that the board has shareholders' interests in mind. Generally, the argument can be made that reasonable compensation levels are evidence of good decision-making.
Does Greatech Technology Berhad deserve to be on your watch list?
There's no denying that Greatech Technology Berhad has been growing its earnings per share at a very impressive rate. This is attractive. If you need more persuasion than the EPS growth rate, don't forget the reasonable compensation and high insider ownership. The overall message here is that Greatech Technology Berhad has fundamental strengths that are worth considering. Here's what you need to know before you take the next step: 1 warning sign for Greatech Technology Berhad What we discovered.
There is always a chance of making a profit by buying stocks. is not Increased revenue and please do not Insiders are buying shares.However, if you are considering these important metrics, it may be worth checking out these companies: do It has these characteristics. Access a customized list of Malaysian companies that have demonstrated growth, supported by significant insider ownership.
Please note that insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.
Have feedback about this article? Concerns about the content? contact Please contact us directly. Alternatively, send an email to the editorial team at: simplywallst.com
This article by Simply Wall St is general in nature. We use only unbiased methodologies to provide commentary based on historical data and analyst forecasts, and our articles are not intended as 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 analysis based on fundamental data. Please note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no involvement in any of the stocks mentioned herein.
