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. 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.

Despite being in the age of tech-stock blue-sky investing, many investors still adopt a more traditional strategy; buying shares in profitable companies like Tri-Mode System (M) Berhad (KLSE:TRIMODE). While profit isn't the sole metric that should be considered when investing, it's worth recognising businesses that can consistently produce it.

See our latest analysis for Tri-Mode System (M) Berhad

Tri-Mode System (M) Berhad's Improving Profits

Over the last three years, Tri-Mode System (M) Berhad has grown earnings per share (EPS) at as impressive rate from a relatively low point, resulting in a three year percentage growth rate that isn't particularly indicative of expected future performance. As a result, we'll zoom in on growth over the last year, instead. Impressively, Tri-Mode System (M) Berhad's EPS catapulted from RM0.032 to RM0.067, over the last year. Year on year growth of 109% is certainly a sight to behold.

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. Tri-Mode System (M) Berhad maintained stable EBIT margins over the last year, all while growing revenue 24% to RM142m. 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.

Since Tri-Mode System (M) Berhad is no giant, with a market capitalisation of RM65m, you should definitely check its cash and debt before getting too excited about its prospects.

Are Tri-Mode System (M) Berhad Insiders Aligned With All Shareholders?

Many consider high insider ownership to be a strong sign of alignment between the leaders of a company and the ordinary shareholders. So as you can imagine, the fact that Tri-Mode System (M) Berhad insiders own a significant number of shares certainly is appealing. Indeed, with a collective holding of 87%, 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. Of course, Tri-Mode System (M) Berhad is a very small company, with a market cap of only RM65m. So despite a large proportional holding, insiders only have RM57m worth of stock. That might not be a huge sum but it should be enough to keep insiders motivated!