Should You Be Adding Pyung Hwa Holdings (KRX:010770) To Your Watchlist Today?

Explore Pyung Hwa Holdings's Fair Values from the Community and select yours

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. Loss making companies can act like a sponge for capital - so investors should be cautious that they're not throwing good money after bad.

So if this idea of high risk and high reward doesn't suit, you might be more interested in profitable, growing companies, like Pyung Hwa Holdings (KRX:010770). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Pyung Hwa Holdings with the means to add long-term value to shareholders.

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How Fast Is Pyung Hwa Holdings Growing Its Earnings Per Share?

Pyung Hwa Holdings has undergone a massive growth in earnings per share over the last three years. So much so that this three year growth rate wouldn't be a fair assessment of the company's future. So it would be better to isolate the growth rate over the last year for our analysis. To the delight of shareholders, Pyung Hwa Holdings' EPS soared from ₩165 to ₩269, over the last year. That's a fantastic gain of 63%.

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. Pyung Hwa Holdings maintained stable EBIT margins over the last year, all while growing revenue 4.5% to ₩845b. That's progress.

In the chart below, you can see how the company has grown earnings and revenue, over time. To see the actual numbers, click on the chart.

See our latest analysis for Pyung Hwa Holdings

Pyung Hwa Holdings isn't a huge company, given its market capitalisation of ₩66b. That makes it extra important to check on its balance sheet strength.

Are Pyung Hwa Holdings Insiders Aligned With All Shareholders?

Many consider high insider ownership to be a strong sign of alignment between the leaders of a company and the ordinary shareholders. So as you can imagine, the fact that Pyung Hwa Holdings insiders own a significant number of shares certainly is appealing. To be exact, company insiders hold 53% of the company, so their decisions have a significant impact on their investments. This should be seen as a good thing, as it means insiders have a personal interest in delivering the best outcomes for shareholders. In terms of absolute value, insiders have ₩35b invested in the business, at the current share price. So there's plenty there to keep them focused!

Does Pyung Hwa Holdings Deserve A Spot On Your Watchlist?

You can't deny that Pyung Hwa Holdings has grown its earnings per share at a very impressive rate. That's attractive. With EPS growth rates like that, it's hardly surprising to see company higher-ups place confidence in the company through continuing to hold a significant investment. On the balance of its merits, solid EPS growth and company insiders who are aligned with the shareholders would indicate a business that is worthy of further research. Before you take the next step you should know about the 5 warning signs for Pyung Hwa Holdings (2 are concerning!) that we have uncovered.

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 KR 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.