We Ran A Stock Scan For Earnings Growth And China Resources Mixc Lifestyle Services (HKG:1209) Passed With Ease

It's common for many investors, especially those who are inexperienced, to buy shares in companies with a good story even if these companies are loss-making. But as Peter Lynch said in One Up On Wall Street, 'Long shots almost never pay off.' Loss making companies can act like a sponge for capital - so investors should be cautious that they're not throwing good money after bad.

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 China Resources Mixc Lifestyle Services (HKG:1209). While this doesn't necessarily speak to whether it's undervalued, the profitability of the business is enough to warrant some appreciation - especially if its growing.

View our latest analysis for China Resources Mixc Lifestyle Services

How Fast Is China Resources Mixc Lifestyle Services Growing?

Generally, companies experiencing growth in earnings per share (EPS) should see similar trends in share price. That means EPS growth is considered a real positive by most successful long-term investors. Impressively, China Resources Mixc Lifestyle Services has grown EPS by 33% per year, compound, in the last three years. As a general rule, we'd say that if a company can keep up that sort of growth, shareholders will be beaming.

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. China Resources Mixc Lifestyle Services shareholders can take confidence from the fact that EBIT margins are up from 22% to 25%, and revenue is growing. Ticking those two boxes is a good sign of growth, in our 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.

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

Are China Resources Mixc Lifestyle Services Insiders Aligned With All Shareholders?

Insider interest in a company always sparks a bit of intrigue and many investors are on the lookout for companies where insiders are putting their money where their mouth is. Because often, the purchase of stock is a sign that the buyer views it as undervalued. However, insiders are sometimes wrong, and we don't know the exact thinking behind their acquisitions.

With strong conviction, China Resources Mixc Lifestyle Services insiders have stood united by refusing to sell shares over the last year. But more importantly, CFO, VP Zhizhang Nie spent CN¥1.1m acquiring shares, doing so at an average price of CN¥21.90. Strong buying like that could be a sign of opportunity.

Should You Add China Resources Mixc Lifestyle Services To Your Watchlist?

For growth investors, China Resources Mixc Lifestyle Services' raw rate of earnings growth is a beacon in the night. Not only is that growth rate rather juicy, but the insider buying adds fuel to the fire. So on this analysis, China Resources Mixc Lifestyle Services is probably worth spending some time on. While we've looked at the quality of the earnings, we haven't yet done any work to value the stock. So if you like to buy cheap, you may want to check if China Resources Mixc Lifestyle Services is trading on a high P/E or a low P/E, relative to its industry.

The good news is that China Resources Mixc Lifestyle Services is not the only stock with insider buying. Here's a list of small cap, undervalued companies in HK with insider buying in the last three months!

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.