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. 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. 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.
If this kind of company isn't your style, you like companies that generate revenue, and even earn profits, then you may well be interested in Media Prima Berhad (KLSE:MEDIA). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Media Prima Berhad with the means to add long-term value to shareholders.
View our latest analysis for Media Prima Berhad
How Quickly Is Media Prima Berhad Increasing Earnings Per Share?
Generally, companies experiencing growth in earnings per share (EPS) should see similar trends in share price. That makes EPS growth an attractive quality for any company. We can see that in the last three years Media Prima Berhad grew its EPS by 6.6% per year. While that sort of growth rate isn't anything to write home about, it does show the business is growing.
Top-line growth is a great indicator that growth is sustainable, and combined with a high earnings before interest and taxation (EBIT) margin, it's a great way for a company to maintain a competitive advantage in the market. Media Prima Berhad's EBIT margins are flat but, worryingly, its revenue is actually down. While this may raise concerns, investors should investigate the reasoning behind this.
You can take a look at the company's revenue and earnings growth trend, in the chart below. Click on the chart to see the exact numbers.
Of course the knack is to find stocks that have their best days in the future, not in the past. You could base your opinion on past performance, of course, but you may also want to check this interactive graph of professional analyst EPS forecasts for Media Prima Berhad.
Are Media Prima Berhad Insiders Aligned With All Shareholders?
It should give investors a sense of security owning shares in a company if insiders also own shares, creating a close alignment their interests. So it is good to see that Media Prima Berhad insiders have a significant amount of capital invested in the stock. To be specific, they have RM168m worth of shares. That's a lot of money, and no small incentive to work hard. That amounts to 32% of the company, demonstrating a degree of high-level alignment with shareholders.