Does United Laboratories International Holdings (HKG:3933) Deserve A Spot On Your Watchlist?

Like a puppy chasing its tail, some new investors often chase ‘the next big thing’, even if that means buying ‘story stocks’ without revenue, let alone profit. And in . found that it is ‘quite common’ for investors to lose money by buying into ‘pump and dump’ schemes.

If, on the other hand, you like companies that have revenue, and even earn profits, then you may well be interested in United Laboratories International Holdings (HKG:3933). While that doesn’t make the shares worth buying at any price, you can’t deny that successful capitalism requires profit, eventually. Conversely, a loss-making company is yet to prove itself with profit, and eventually the sweet milk of external capital may run sour.

View our latest analysis for United Laboratories International Holdings

How Fast Is United Laboratories International Holdings Growing Its Earnings Per Share?

In business, though not in life, profits are a key measure of success; and share prices tend to reflect earnings per share (EPS). So like a ray of sunshine through a gap in the clouds, improving EPS is considered a good sign. You can imagine, then, that it almost knocked my socks off when I realized that United Laboratories International Holdings grew its EPS from CN¥0.05 to CN¥0.42, in one short year. Even though that growth rate is unlikely to be repeated, that looks like a breakout improvement.

I like to see top-line growth as an indication that growth is sustainable, and I look for a high earnings before interest and taxation (EBIT) margin to point to a competitive moat (though some companies with low margins also have moats). The good news is that United Laboratories International Holdings is growing revenues, and EBIT margins improved by 3.6 percentage points to 12%, over the last year. Ticking those two boxes is a good sign of growth, in my book.

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.

SEHK:3933 Income Statement, April 16th 2019
SEHK:3933 Income Statement, April 16th 2019

While we live in the present moment at all times, there’s no doubt in my mind that the future matters more than the past. So why not check this interactive chart depicting future EPS estimates, for United Laboratories International Holdings?

Are United Laboratories International Holdings Insiders Aligned With All Shareholders?

Should You Add United Laboratories International Holdings To Your Watchlist?

United Laboratories International Holdings’s earnings per share have taken off like a rocket aimed right at the moon. Now, you could try to make up your mind on United Laboratories International Holdings by focusing on just these factors, or you could also consider how its price-to-earnings ratio compares to other companies in its industry.

Although United Laboratories International Holdings certainly looks good to me, I would like it more if insiders were buying up shares. If you like to see insider buying, too, 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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