Here's Why Sjg SejongLtd (KRX:033530) Has Caught The Eye Of Investors

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 Sjg SejongLtd (KRX:033530). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Sjg SejongLtd with the means to add long-term value to shareholders.

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Sjg SejongLtd's Improving Profits

In the last three years Sjg SejongLtd's earnings per share took off; so much so that it's a bit disingenuous to use these figures to try and deduce long term estimates. So it would be better to isolate the growth rate over the last year for our analysis. Outstandingly, Sjg SejongLtd's EPS shot from ₩1,161 to ₩2,493, over the last year. It's a rarity to see 115% year-on-year growth like that.

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 Sjg SejongLtd remained fairly unchanged over the last year, however the company should be pleased to report its revenue growth for the period of 4.1% to ₩1.9t. That's encouraging news for the company!

You can take a look at the company's revenue and earnings growth trend, in the chart below. For finer detail, click on the image.

View our latest analysis for Sjg SejongLtd

Fortunately, we've got access to analyst forecasts of Sjg SejongLtd's future profits. You can do your own forecasts without looking, or you can take a peek at what the professionals are predicting.

Are Sjg SejongLtd 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. Shareholders will be pleased by the fact that insiders own Sjg SejongLtd shares worth a considerable sum. To be specific, they have ₩33b worth of shares. This considerable investment should help drive long-term value in the business. Those holdings account for over 12% of the company; visible skin in the game.

Should You Add Sjg SejongLtd To Your Watchlist?

Sjg SejongLtd's earnings per share growth have been climbing higher at an appreciable rate. That EPS growth certainly is attention grabbing, and the large insider ownership only serves to further stoke our interest. The hope is, of course, that the strong growth marks a fundamental improvement in the business economics. So at the surface level, Sjg SejongLtd is worth putting on your watchlist; after all, shareholders do well when the market underestimates fast growing companies. What about risks? Every company has them, and we've spotted 1 warning sign for Sjg SejongLtd you should know about.

Although Sjg SejongLtd certainly looks good, it may appeal to more investors if insiders were buying up shares. If you like to see companies with more skin in the game, then check out this handpicked selection of South Korean companies that not only boast of strong growth but have strong insider backing.

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.