If You Like EPS Growth Then Check Out Mi Ming Mart Holdings (HKG:8473) Before It's Too Late

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. Unfortunately, high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson.

If, on the other hand, you like companies that have revenue, and even earn profits, then you may well be interested in Mi Ming Mart Holdings (HKG:8473). Now, I'm not saying that the stock is necessarily undervalued today; but I can't shake an appreciation for the profitability of the business itself. While a well funded company may sustain losses for years, unless its owners have an endless appetite for subsidizing the customer, it will need to generate a profit eventually, or else breathe its last breath.

See our latest analysis for Mi Ming Mart Holdings

How Fast Is Mi Ming Mart Holdings Growing Its Earnings Per Share?

Even with very modest growth rates, a company will usually do well if it improves earnings per share (EPS) year after year. So it's no surprise that some investors are more inclined to invest in profitable businesses. Like a firecracker arcing through the night sky, Mi Ming Mart Holdings's EPS shot from HK$0.011 to HK$0.021, over the last year. Year on year growth of 93% is certainly a sight to behold.

One way to double-check a company's growth is to look at how its revenue, and earnings before interest and tax (EBIT) margins are changing. Mi Ming Mart Holdings shareholders can take confidence from the fact that EBIT margins are up from 19% to 23%, and revenue is growing. Ticking those two boxes is a good sign of growth, in my book.

You can take a look at the company's revenue and earnings growth trend, in the chart below.

Since Mi Ming Mart Holdings is no giant, with a market capitalization of HK$264m, so you should definitely check its cash and debt before getting too excited about its prospects.

Are Mi Ming Mart Holdings Insiders Aligned With All Shareholders?

Personally, I like to see high insider ownership of a company, since it suggests that it will be managed in the interests of shareholders. So as you can imagine, the fact that Mi Ming Mart Holdings insiders own a significant number of shares certainly appeals to me. Indeed, with a collective holding of 70%, company insiders are in control and have plenty of capital behind the venture. This makes me think they will be incentivised to plan for the long term - something I like to see. With that sort of holding, insiders have about HK$184m riding on the stock, at current prices. That should be more than enough to keep them focussed on creating shareholder value!

Is Mi Ming Mart Holdings Worth Keeping An Eye On?

Mi Ming Mart Holdings's earnings per share have taken off like a rocket aimed right at the moon. That sort of growth is nothing short of eye-catching, and the large investment held by insiders certainly brightens my view of the company. At times fast EPS growth is a sign the business has reached an inflection point; and I do like those. So to my mind Mi Ming Mart Holdings is worth putting on your watchlist; after all, shareholders do well when the market underestimates fast growing companies. Of course, just because Mi Ming Mart Holdings is growing does not mean it is undervalued. If you're wondering about the valuation, check out this gauge of its price-to-earnings ratio, as compared to its industry.

You can invest in any company you want. But if you prefer to focus on stocks that have demonstrated insider buying, here is a list of companies 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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