If EPS Growth Is Important To You, SAMYOUNG M-Tek (KOSDAQ:054540) Presents An Opportunity

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. Sometimes these stories can cloud the minds of investors, leading them to invest with their emotions rather than on the merit of good company fundamentals. Loss-making companies are always racing against time to reach financial sustainability, so investors in these companies may be taking on more risk than they should.

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 SAMYOUNG M-Tek (KOSDAQ:054540). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide SAMYOUNG M-Tek with the means to add long-term value to shareholders.

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How Fast Is SAMYOUNG M-Tek Growing Its Earnings Per Share?

SAMYOUNG M-Tek has undergone a massive growth in earnings per share over the last three years. So much so that this three year growth rate wouldn't be a fair assessment of the company's future. As a result, we'll zoom in on growth over the last year, instead. To the delight of shareholders, SAMYOUNG M-Tek's EPS soared from ₩542 to ₩706, over the last year. That's a fantastic gain of 30%.

Careful consideration of revenue growth and earnings before interest and taxation (EBIT) margins can help inform a view on the sustainability of the recent profit growth. Despite the relatively flat revenue figures, shareholders will be pleased to see EBIT margins have grown from 7.0% to 11% in the last 12 months. That's something to smile about.

The chart below shows how the company's bottom and top lines have progressed over time. To see the actual numbers, click on the chart.

Check out our latest analysis for SAMYOUNG M-Tek

Since SAMYOUNG M-Tek is no giant, with a market capitalisation of ₩162b, you should definitely check its cash and debt before getting too excited about its prospects.

Are SAMYOUNG M-Tek Insiders Aligned With All Shareholders?

It's pleasing to see company leaders with putting their money on the line, so to speak, because it increases alignment of incentives between the people running the business, and its true owners. So it is good to see that SAMYOUNG M-Tek insiders have a significant amount of capital invested in the stock. As a matter of fact, their holding is valued at ₩21b. That shows significant buy-in, and may indicate conviction in the business strategy. Those holdings account for over 13% of the company; visible skin in the game.

Should You Add SAMYOUNG M-Tek To Your Watchlist?

You can't deny that SAMYOUNG M-Tek has grown its earnings per share at a very impressive rate. That's attractive. With EPS growth rates like that, it's hardly surprising to see company higher-ups place confidence in the company through continuing to hold a significant investment. The growth and insider confidence is looked upon well and so it's worthwhile to investigate further with a view to discern the stock's true value. You still need to take note of risks, for example - SAMYOUNG M-Tek has 2 warning signs (and 1 which doesn't sit too well with us) we think you should know about.

There's always the possibility of doing well buying stocks that are not growing earnings and do not have insiders buying shares. But for those who consider these important metrics, we encourage you to check out companies that do have those features. You can access a tailored list of South Korean companies which have demonstrated growth backed by significant insider holdings.

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.