With EPS Growth And More, Perak Transit Berhad (KLSE:PTRANS) Makes An Interesting Case
editorial-team@simplywallst.com (Simply Wall St)
4 min read
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. But as Peter Lynch said in One Up On Wall Street, 'Long shots almost never pay off.' 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 Perak Transit Berhad (KLSE:PTRANS). While profit isn't the sole metric that should be considered when investing, it's worth recognising businesses that can consistently produce it.
We've discovered 2 warning signs about Perak Transit Berhad. View them for free.
Perak Transit Berhad's Improving Profits
Even modest earnings per share growth (EPS) can create meaningful value, when it is sustained reliably from year to year. So it's no surprise that some investors are more inclined to invest in profitable businesses. Over the last year, Perak Transit Berhad increased its EPS from RM0.06 to RM0.063. That's a modest gain of 4.9%.
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. While we note Perak Transit Berhad achieved similar EBIT margins to last year, revenue grew by a solid 7.8% to RM187m. That's a real positive.
In the chart below, you can see how the company has grown earnings and revenue, over time. For finer detail, click on the image.
KLSE:PTRANS Earnings and Revenue History May 18th 2025
Are Perak Transit 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 Perak Transit Berhad insiders have a significant amount of capital invested in the stock. Given insiders own a significant chunk of shares, currently valued at RM245m, they have plenty of motivation to push the business to succeed. Amounting to 31% of the outstanding shares, indicating that insiders are also significantly impacted by the decisions they make on the behalf of the business.
It's good to see that insiders are invested in the company, but are remuneration levels reasonable? Our quick analysis into CEO remuneration would seem to indicate they are. For companies with market capitalisations between RM430m and RM1.7b, like Perak Transit Berhad, the median CEO pay is around RM666k.
Perak Transit Berhad's CEO only received compensation totalling RM92k in the year to December 2024. This could be considered a token amount, and indicates that the company does not need to use payment to motivate the CEO - that is often a good sign. CEO compensation is hardly the most important aspect of a company to consider, but when it's reasonable, that gives a little more confidence that leadership are looking out for shareholder interests. Generally, arguments can be made that reasonable pay levels attest to good decision-making.
Does Perak Transit Berhad Deserve A Spot On Your Watchlist?
One positive for Perak Transit Berhad is that it is growing EPS. That's nice to see. The growth of EPS may be the eye-catching headline for Perak Transit Berhad, but there's more to bring joy for shareholders. With company insiders aligning themselves considerably with the company's success and modest CEO compensation, there's no arguments that this is a stock worth looking into. We don't want to rain on the parade too much, but we did also find 2 warning signs for Perak Transit Berhad (1 is a bit unpleasant!) that you need to be mindful of.
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.
