MatsukiyoCocokara (TSE:3088) Ticks All The Boxes When It Comes To Earnings Growth

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. Unfortunately, these high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson. 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 MatsukiyoCocokara (TSE:3088), 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 MatsukiyoCocokara with the means to add long-term value to shareholders.

This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.

MatsukiyoCocokara's Earnings Per Share Are Growing

If a company can keep growing earnings per share (EPS) long enough, its share price should eventually follow. Therefore, there are plenty of investors who like to buy shares in companies that are growing EPS. We can see that in the last three years MatsukiyoCocokara grew its EPS by 14% per year. That growth rate is fairly good, assuming the company can keep it up.

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 we note MatsukiyoCocokara achieved similar EBIT margins to last year, revenue grew by a solid 4.0% to JP¥1.1t. That's progress.

You can take a look at the company's revenue and earnings growth trend, in the chart below. Click on the chart to see the exact numbers.

View our latest analysis for MatsukiyoCocokara

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

Are MatsukiyoCocokara Insiders Aligned With All Shareholders?

We would not expect to see insiders owning a large percentage of a JP¥1.2t company like MatsukiyoCocokara. But we do take comfort from the fact that they are investors in the company. We note that their impressive stake in the company is worth JP¥71b. This suggests that leadership will be very mindful of shareholders' interests when making decisions!

Should You Add MatsukiyoCocokara To Your Watchlist?

As previously touched on, MatsukiyoCocokara is a growing business, which is encouraging. If that's not enough on its own, there is also the rather notable levels of insider ownership. These two factors are a huge highlight for the company which should be a strong contender your watchlists. Now, you could try to make up your mind on MatsukiyoCocokara 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 MatsukiyoCocokara 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 Japanese 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.