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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. Sometimes these stories can cloud the minds of investors, leading them to invest with their emotions rather than on the merit of good company fundamentals. A loss-making company is yet to prove itself with profit, and eventually the inflow of external capital may dry up.
In contrast to all that, many investors prefer to focus on companies like Intraco (SGX:I06), which has not only revenues, but also profits. Now this is not to say that the company presents the best investment opportunity around, but profitability is a key component to success in business.
Check out our latest analysis for Intraco
How Fast Is Intraco 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 Intraco's EPS went from S$0.00036 to S$0.028 in just one year. Even though that growth rate may not be repeated, that looks like a breakout improvement.
Careful consideration of revenue growth and earnings before interest and taxation (EBIT) margins can help inform a view on the sustainability of the recent profit growth. Intraco maintained stable EBIT margins over the last year, all while growing revenue 4.5% to S$174m. That's a real positive.
The chart below shows how the company's bottom and top lines have progressed over time. For finer detail, click on the image.
Intraco isn't a huge company, given its market capitalisation of S$42m. That makes it extra important to check on its balance sheet strength.
Are Intraco Insiders Aligned With All Shareholders?
It's said that there's no smoke without fire. For investors, insider buying is often the smoke that indicates which stocks could set the market alight. That's because insider buying often indicates that those closest to the company have confidence that the share price will perform well. However, insiders are sometimes wrong, and we don't know the exact thinking behind their acquisitions.
First things first, there weren't any reports of insiders selling shares in Intraco in the last 12 months. But the important part is that Executive Chairman Lye Mak spent S$573k buying stock, at an average price of S$0.29. Purchases like this can offer an insight into the faith of the company's management - and it seems to be all positive.