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. A loss-making company is yet to prove itself with profit, and eventually the inflow of external capital may dry up.

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 A-Sonic Aerospace (SGX:BTJ). While profit isn't the sole metric that should be considered when investing, it's worth recognising businesses that can consistently produce it.

View our latest analysis for A-Sonic Aerospace

How Quickly Is A-Sonic Aerospace Increasing Earnings Per Share?

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. So it makes sense that experienced investors pay close attention to company EPS when undertaking investment research. Recognition must be given to the that A-Sonic Aerospace has grown EPS by 56% per year, over the last three years. While that sort of growth rate isn't sustainable for long, it certainly catches the eye of prospective investors.

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. EBIT margins for A-Sonic Aerospace remained fairly unchanged over the last year, however the company should be pleased to report its revenue growth for the period of 45% to US$489m. That's progress.

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.

Since A-Sonic Aerospace is no giant, with a market capitalisation of S$46m, you should definitely check its cash and debt before getting too excited about its prospects.

Are A-Sonic Aerospace Insiders Aligned With All Shareholders?

Investors are always searching for a vote of confidence in the companies they hold and insider buying is one of the key indicators for optimism on the market. Because often, the purchase of stock is a sign that the buyer views it as undervalued. However, small purchases are not always indicative of conviction, and insiders don't always get it right.

Any way you look at it A-Sonic Aerospace shareholders can gain quiet confidence from the fact that insiders shelled out US$578k to buy stock, over the last year. And when you consider that there was no insider selling, you can understand why shareholders might believe that there are brighter days ahead. We also note that it was the Co-Founder, L. C. Tan, who made the biggest single acquisition, paying S$75k for shares at about S$0.47 each.

On top of the insider buying, we can also see that A-Sonic Aerospace insiders own a large chunk of the company. Indeed, with a collective holding of 66%, company insiders are in control and have plenty of capital behind the venture. This should be seen as a good thing, as it means insiders have a personal interest in delivering the best outcomes for shareholders. With that sort of holding, insiders have about US$31m riding on the stock, at current prices. That should be more than enough to keep them focussed on creating shareholder value!

Does A-Sonic Aerospace Deserve A Spot On Your Watchlist?

A-Sonic Aerospace's earnings per share growth have been climbing higher at an appreciable rate. What's more, insiders own a significant stake in the company and have been buying more shares. These factors seem to indicate the company's potential and that it has reached an inflection point. We'd suggest A-Sonic Aerospace belongs near the top of your watchlist. Don't forget that there may still be risks. For instance, we've identified 2 warning signs for A-Sonic Aerospace that you should be aware of.

The good news is that A-Sonic Aerospace is not the only growth stock with insider buying. Here's a list of them... with insider buying in the last three months!

Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

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