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It's common for many investors, especially those who are inexperienced, to buy shares in companies with a good story even if these companies are loss-making. Unfortunately, these high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson. While a well funded company may sustain losses for years, it will need to generate a profit eventually, or else investors will move on and the company will wither away.
So if this idea of high risk and high reward doesn't suit, you might be more interested in profitable, growing companies, like Bumitama Agri (SGX:P8Z). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Bumitama Agri with the means to add long-term value to shareholders.
See our latest analysis for Bumitama Agri
How Quickly Is Bumitama Agri Increasing Earnings Per Share?
The market is a voting machine in the short term, but a weighing machine in the long term, so you'd expect share price to follow earnings per share (EPS) outcomes eventually. Therefore, there are plenty of investors who like to buy shares in companies that are growing EPS. Shareholders will be happy to know that Bumitama Agri's EPS has grown 22% each year, compound, over three years. If growth like this continues on into the future, then shareholders will have plenty to smile about.
It's often helpful to take a look at earnings before interest and tax (EBIT) margins, as well as revenue growth, to get another take on the quality of the company's growth. While we note Bumitama Agri achieved similar EBIT margins to last year, revenue grew by a solid 8.3% to Rp16t. That's progress.
In the chart below, you can see how the company has grown earnings and revenue, over time. For finer detail, click on the image.
You don't drive with your eyes on the rear-view mirror, so you might be more interested in this free report showing analyst forecasts for Bumitama Agri's future profits.
Are Bumitama Agri Insiders Aligned With All Shareholders?
Investors are always searching for a vote of confidence in the companies they hold and insider buying is one of the key indicators for optimism on the market. Because often, the purchase of stock is a sign that the buyer views it as undervalued. Of course, we can never be sure what insiders are thinking, we can only judge their actions.
With strong conviction, Bumitama Agri insiders have stood united by refusing to sell shares over the last year. But the real excitement comes from the Rp74k that Lead Independent Director Hung Siang Lim spent buying shares (at an average price of about Rp0.74). Strong buying like that could be a sign of opportunity.