In This Article:
Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
Some have more dollars than sense, they say, so even companies that have no revenue, no profit, and a record of falling short, can easily find investors. But the reality is that when a company loses money each year, for long enough, its investors will usually take their share of those losses.
In contrast to all that, I prefer to spend time on companies like Asia Commercial Holdings (HKG:104), which has not only revenues, but also profits. While that doesn't make the shares worth buying at any price, you can't deny that successful capitalism requires profit, eventually. Loss-making companies are always racing against time to reach financial sustainability, but time is often a friend of the profitable company, especially if it is growing.
View our latest analysis for Asia Commercial Holdings
Asia Commercial Holdings's Improving Profits
Over the last three years, Asia Commercial Holdings has grown earnings per share (EPS) like young bamboo after rain; fast, and from a low base. So I don't think the percent growth rate is particularly meaningful. As a result, I'll zoom in on growth over the last year, instead. Like the last firework on New Year's Eve accelerating into the sky, Asia Commercial Holdings's EPS shot from HK$0.041 to HK$0.11, over the last year. You don't see 167% year-on-year growth like that, very often.
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. Unfortunately, Asia Commercial Holdings's revenue dropped 2.3% last year, but the silver lining is that EBIT margins improved from 1.4% to 6.9%. That's not ideal.
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.
Since Asia Commercial Holdings is no giant, with a market capitalization of HK$433m, so you should definitely check its cash and debt before getting too excited about its prospects.
Are Asia Commercial Holdings Insiders Aligned With All Shareholders?
Like that fresh smell in the air when the rains are coming, insider buying fills me with optimistic anticipation. That's because insider buying often indicates that those closest to the company have confidence that the share price will perform well. Of course, we can never be sure what insiders are thinking, we can only judge their actions.
One gleaming positive for Asia Commercial Holdings, in the last year, is that a certain insider has buying shares with ample enthusiasm. In one fell swoop, Founder & Executive Chairman Yin Eav, spent HK$3.9m, at a price of HK$0.86 per share. Big insider buys like that are almost as rare as an ocean free of single use plastic waste.