If EPS Growth Is Important To You, FinTech Global (TSE:8789) Presents An Opportunity

For beginners, it can seem like a good idea (and an exciting prospect) to buy a company that tells a good story to investors, even if it currently lacks a track record of revenue and profit. Sometimes these stories can cloud the minds of investors, leading them to invest with their emotions rather than on the merit of good company fundamentals. A loss-making company is yet to prove itself with profit, and eventually the inflow of external capital may dry up.

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 FinTech Global (TSE:8789). While profit isn't the sole metric that should be considered when investing, it's worth recognising businesses that can consistently produce it.

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FinTech Global's Improving Profits

In the last three years FinTech Global's earnings per share took off; so much so that it's a bit disingenuous to use these figures to try and deduce long term estimates. Thus, it makes sense to focus on more recent growth rates, instead. It's good to see that FinTech Global's EPS has grown from JP¥8.39 to JP¥10.02 over twelve months. This amounts to a 19% gain; a figure that shareholders will be pleased to see.

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. The good news is that FinTech Global is growing revenues, and EBIT margins improved by 3.7 percentage points to 20%, over the last year. That's great to see, on both counts.

In the chart below, you can see how the company has grown earnings and revenue, over time. For finer detail, click on the image.

Check out our latest analysis for FinTech Global

Since FinTech Global is no giant, with a market capitalisation of JP¥19b, you should definitely check its cash and debt before getting too excited about its prospects.

Are FinTech Global Insiders Aligned With All Shareholders?

It's pleasing to see company leaders with putting their money on the line, so to speak, because it increases alignment of incentives between the people running the business, and its true owners. Shareholders will be pleased by the fact that insiders own FinTech Global shares worth a considerable sum. Indeed, they hold JP¥2.2b worth of its stock. That shows significant buy-in, and may indicate conviction in the business strategy. As a percentage, this totals to 12% of the shares on issue for the business, an appreciable amount considering the market cap.

Does FinTech Global Deserve A Spot On Your Watchlist?

One important encouraging feature of FinTech Global is that it is growing profits. For those who are looking for a little more than this, the high level of insider ownership enhances our enthusiasm for this growth. That combination is very appealing. So yes, we do think the stock is worth keeping an eye on. You still need to take note of risks, for example - FinTech Global has 2 warning signs (and 1 which is potentially serious) we think you should know about.

While opting for stocks without growing earnings and absent insider buying can yield results, for investors valuing these key metrics, here is a carefully selected list of companies in JP with promising growth potential and insider confidence.

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.