With EPS Growth And More, Kasumigaseki CapitalLtd (TSE:3498) Makes An Interesting Case

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.

Despite being in the age of tech-stock blue-sky investing, many investors still adopt a more traditional strategy; buying shares in profitable companies like Kasumigaseki CapitalLtd (TSE:3498). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Kasumigaseki CapitalLtd with the means to add long-term value to shareholders.

View our latest analysis for Kasumigaseki CapitalLtd

How Fast Is Kasumigaseki CapitalLtd Growing Its Earnings Per Share?

In the last three years Kasumigaseki CapitalLtd'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. So it would be better to isolate the growth rate over the last year for our analysis. Outstandingly, Kasumigaseki CapitalLtd's EPS shot from JP¥253 to JP¥510, over the last year. It's not often a company can achieve year-on-year growth of 102%. That could be a sign that the business has reached a true inflection point.

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. Kasumigaseki CapitalLtd maintained stable EBIT margins over the last year, all while growing revenue 76% to JP¥66b. That's progress.

In the chart below, you can see how the company has grown earnings and revenue, over time. Click on the chart to see the exact numbers.

The trick, as an investor, is to find companies that are going to perform well in the future, not just in the past. While crystal balls don't exist, you can check our visualization of consensus analyst forecasts for Kasumigaseki CapitalLtd's future EPS 100% free.

Are Kasumigaseki CapitalLtd 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 Kasumigaseki CapitalLtd shares worth a considerable sum. Notably, they have an enviable stake in the company, worth JP¥39b. Coming in at 34% of the business, that holding gives insiders a lot of influence, and plenty of reason to generate value for shareholders. Very encouraging.

Should You Add Kasumigaseki CapitalLtd To Your Watchlist?

Kasumigaseki CapitalLtd's earnings per share growth have been climbing higher at an appreciable rate. This level of EPS growth does wonders for attracting investment, and the large insider investment in the company is just the cherry on top. The hope is, of course, that the strong growth marks a fundamental improvement in the business economics. So based on this quick analysis, we do think it's worth considering Kasumigaseki CapitalLtd for a spot on your watchlist. Even so, be aware that Kasumigaseki CapitalLtd is showing 5 warning signs in our investment analysis , and 3 of those make us uncomfortable...

Although Kasumigaseki CapitalLtd 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.

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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.