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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. A loss-making company is yet to prove itself with profit, and eventually the inflow of external capital may dry up.
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 OptimumBank Holdings (NASDAQ:OPHC). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide OptimumBank Holdings with the means to add long-term value to shareholders.
See our latest analysis for OptimumBank Holdings
How Fast Is OptimumBank Holdings Growing Its Earnings Per Share?
Investors and investment funds chase profits, and that means share prices tend rise with positive earnings per share (EPS) outcomes. So for many budding investors, improving EPS is considered a good sign. It is awe-striking that OptimumBank Holdings' EPS went from US$0.21 to US$1.22 in just one year. While it's difficult to sustain growth at that level, it bodes well for the company's outlook for the future. Could this be a sign that the business has reached an inflection point?
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. Our analysis has highlighted that OptimumBank Holdings' revenue from operations did not account for all of their revenue in the previous 12 months, so our analysis of its margins might not accurately reflect the underlying business. While we note OptimumBank Holdings achieved similar EBIT margins to last year, revenue grew by a solid 100% to US$13m. That's a real positive.
You can take a look at the company's revenue and earnings growth trend, in the chart below. To see the actual numbers, click on the chart.
Since OptimumBank Holdings is no giant, with a market capitalisation of US$24m, you should definitely check its cash and debt before getting too excited about its prospects.
Are OptimumBank Holdings Insiders Aligned With All Shareholders?
As a general rule, it's worth considering how much the CEO is paid, since unreasonably high rates could be considered against the interests of shareholders. For companies with market capitalisations under US$200m, like OptimumBank Holdings, the median CEO pay is around US$770k.