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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 the reality is that when a company loses money each year, for long enough, its investors will usually take their share of those losses. Loss making companies can act like a sponge for capital - so investors should be cautious that they're not throwing good money after bad.
So if this idea of high risk and high reward doesn't suit, you might be more interested in profitable, growing companies, like Sing Investments & Finance (SGX:S35). While profit isn't the sole metric that should be considered when investing, it's worth recognising businesses that can consistently produce it.
Check out our latest analysis for Sing Investments & Finance
How Fast Is Sing Investments & Finance Growing?
If you believe that markets are even vaguely efficient, then over the long term you'd expect a company's share price to follow its earnings per share (EPS) outcomes. That means EPS growth is considered a real positive by most successful long-term investors. Over the last three years, Sing Investments & Finance has grown EPS by 5.0% 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. It's noted that Sing Investments & Finance's revenue from operations was lower than its revenue in the last twelve months, so that could distort our analysis of its margins. While we note Sing Investments & Finance achieved similar EBIT margins to last year, revenue grew by a solid 5.4% to S$72m. That's progress.
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.
Sing Investments & Finance isn't a huge company, given its market capitalisation of S$265m. That makes it extra important to check on its balance sheet strength.
Are Sing Investments & Finance 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 Sing Investments & Finance insiders have a significant amount of capital invested in the stock. As a matter of fact, their holding is valued at S$30m. That's a lot of money, and no small incentive to work hard. Those holdings account for over 11% of the company; visible skin in the game.