Here’s Why Perusahaan Sadur Timah Malaysia (Perstima) Berhad (KLSE:PERSTIM) Has Caught The Eye Of Investors
For beginners, it can seem like a good idea (and an exciting prospect) to buy a company that tells a good story to investors, even if it currently lacks a track record of revenue and profit. Unfortunately, these high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson. 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 Perusahaan Sadur Timah Malaysia (Perstima) Berhad (KLSE:PERSTIM). 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 Perusahaan Sadur Timah Malaysia (Perstima) Berhad
How Fast Is Perusahaan Sadur Timah Malaysia (Perstima) Berhad 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. So it makes sense that experienced investors pay close attention to company EPS when undertaking investment research. Impressively, Perusahaan Sadur Timah Malaysia (Perstima) Berhad has grown EPS by 18% per year, compound, in the last three years. If growth like this continues on into the future, then shareholders will have plenty to smile about.
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 Perusahaan Sadur Timah Malaysia (Perstima) Berhad remained fairly unchanged over the last year, however the company should be pleased to report its revenue growth for the period of 43% to RM1.6b. That’s encouraging news for the company!
The chart below shows how the company’s bottom and top lines have progressed over time. Click on the chart to see the exact numbers.
Perusahaan Sadur Timah Malaysia (Perstima) Berhad isn’t a huge company, given its market capitalisation of RM567m. That makes it extra important to check on its balance sheet strength.
Are Perusahaan Sadur Timah Malaysia (Perstima) 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. Shareholders will be pleased by the fact that insiders own Perusahaan Sadur Timah Malaysia (Perstima) Berhad shares worth a considerable sum. To be specific, they have RM67m worth of shares. This considerable investment should help drive long-term value in the business. As a percentage, this totals to 12% of the shares on issue for the business, an appreciable amount considering the market cap.
Is Perusahaan Sadur Timah Malaysia (Perstima) Berhad Worth Keeping An Eye On?
If you believe that share price follows earnings per share you should definitely be delving further into Perusahaan Sadur Timah Malaysia (Perstima) Berhad’s strong EPS growth. This EPS growth rate is something the company should be proud of, and so it’s no surprise that insiders are holding on to a considerable chunk of shares. Fast growth and confident insiders should be enough to warrant further research, so it would seem that it’s a good stock to follow. However, before you get too excited we’ve discovered 1 warning sign for Perusahaan Sadur Timah Malaysia (Perstima) Berhad that you should be aware of.
Although Perusahaan Sadur Timah Malaysia (Perstima) Berhad certainly looks good, it may appeal to more investors if insiders were buying up shares. If you like to see insider buying, then this free list of growing companies that insiders are buying, could be exactly what you’re looking for.
Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.
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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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