Is Now The Time To Put Wanda Hotel Development (HKG:169) On Your Watchlist?

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 the reality is that when a company loses money each year, for long enough, its investors will usually take their share of those losses. While a well funded company may sustain losses for years, it will need to generate a profit eventually, or else investors will move on and the company will wither away.

In contrast to all that, many investors prefer to focus on companies like Wanda Hotel Development (HKG:169), which has not only revenues, but also profits. Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Wanda Hotel Development with the means to add long-term value to shareholders.

View our latest analysis for Wanda Hotel Development

How Fast Is Wanda Hotel Development Growing Its Earnings Per Share?

Over the last three years, Wanda Hotel Development has grown earnings per share (EPS) at as impressive rate from a relatively low point, resulting in a three year percentage growth rate that isn't particularly indicative of expected future performance. As a result, we'll zoom in on growth over the last year, instead. Wanda Hotel Development's EPS skyrocketed from HK$0.033 to HK$0.044, in just one year; a result that's bound to bring a smile to shareholders. That's a impressive gain of 37%.

Top-line growth is a great indicator that growth is sustainable, and combined with a high earnings before interest and taxation (EBIT) margin, it's a great way for a company to maintain a competitive advantage in the market. While Wanda Hotel Development's EBIT margins are down, it's not all bad news as revenues are at least stable. That doesn't inspire a great deal of confidence.

You can take a look at the company's revenue and earnings growth trend, in the chart below. To see the actual numbers, click on the chart.

Since Wanda Hotel Development is no giant, with a market capitalisation of HK$1.6b, you should definitely check its cash and debt before getting too excited about its prospects.

Are Wanda Hotel Development Insiders Aligned With All Shareholders?

It's a necessity that company leaders act in the best interest of shareholders and so insider investment always comes as a reassurance to the market. Shareholders will be pleased by the fact that insiders own Wanda Hotel Development shares worth a considerable sum. As a matter of fact, their holding is valued at HK$101m. That shows significant buy-in, and may indicate conviction in the business strategy. As a percentage, this totals to 6.4% of the shares on issue for the business, an appreciable amount considering the market cap.

Does Wanda Hotel Development Deserve A Spot On Your Watchlist?

If you believe that share price follows earnings per share you should definitely be delving further into Wanda Hotel Development'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. 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. Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Wanda Hotel Development that you should be aware of.

Although Wanda Hotel Development 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.