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. Unfortunately, these high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson. Loss-making companies are always racing against time to reach financial sustainability, so investors in these companies may be taking on more risk than they should.
In contrast to all that, many investors prefer to focus on companies like Press Metal Aluminium Holdings Berhad (KLSE:PMETAL), which has not only revenues, but also profits. Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Press Metal Aluminium Holdings Berhad with the means to add long-term value to shareholders.
View our latest analysis for Press Metal Aluminium Holdings Berhad
How Fast Is Press Metal Aluminium Holdings Berhad Growing?
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. That makes EPS growth an attractive quality for any company. Impressively, Press Metal Aluminium Holdings Berhad has grown EPS by 22% per year, compound, in the last three years. As a general rule, we'd say that if a company can keep up that sort of growth, shareholders will be beaming.
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. Press Metal Aluminium Holdings Berhad maintained stable EBIT margins over the last year, all while growing revenue 5.0% to RM15b. That's encouraging news for the company!
In the chart below, you can see how the company has grown earnings and revenue, over time. Click on the chart to see the exact numbers.
In investing, as in life, the future matters more than the past. So why not check out this free interactive visualization of Press Metal Aluminium Holdings Berhad's forecast profits?
Are Press Metal Aluminium Holdings Berhad Insiders Aligned With All Shareholders?
Since Press Metal Aluminium Holdings Berhad has a market capitalisation of RM41b, we wouldn't expect insiders to hold a large percentage of shares. But we are reassured by the fact they have invested in the company. We note that their impressive stake in the company is worth RM9.6b. This totals to 23% of shares in the company. Enough to lead management's decision making process down a path that brings the most benefit to shareholders. Very encouraging.