Is Now The Time To Put SAMYOUNG M-Tek (KOSDAQ:054540) On Your Watchlist?

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. And in their study titled Who Falls Prey to the Wolf of Wall Street?' Leuz et. al. found that it is 'quite common' for investors to lose money by buying into 'pump and dump' schemes.

If, on the other hand, you like companies that have revenue, and even earn profits, then you may well be interested in SAMYOUNG M-Tek (KOSDAQ:054540). Even if the shares are fully valued today, most capitalists would recognize its profits as the demonstration of steady value generation. In comparison, loss making companies act like a sponge for capital - but unlike such a sponge they do not always produce something when squeezed.

See our latest analysis for SAMYOUNG M-Tek

SAMYOUNG M-Tek's Improving Profits

Over the last three years, SAMYOUNG M-Tek has grown earnings per share (EPS) like young bamboo after rain; fast, and from a low base. So I don't think the percent growth rate is particularly meaningful. As a result, I'll zoom in on growth over the last year, instead. Like a firecracker arcing through the night sky, SAMYOUNG M-Tek's EPS shot from ₩273 to ₩576, over the last year. You don't see 111% year-on-year growth like that, very often.

I like to take a look at earnings before interest and (EBIT) tax margins, as well as revenue growth, to get another take on the quality of the company's growth. Unfortunately, revenue is down and so are margins. That is, not a hint of euphemism here, suboptimal.

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.

Since SAMYOUNG M-Tek is no giant, with a market capitalization of ₩69b, so you should definitely check its cash and debt before getting too excited about its prospects.

Are SAMYOUNG M-Tek Insiders Aligned With All Shareholders?

It makes me feel more secure owning shares in a company if insiders also own shares, thusly more closely aligning our interests. As a result, I'm encouraged by the fact that insiders own SAMYOUNG M-Tek shares worth a considerable sum. To be specific, they have ₩14b worth of shares. That shows significant buy-in, and may indicate conviction in the business strategy. That amounts to 20% of the company, demonstrating a degree of high-level alignment with shareholders.

Should You Add SAMYOUNG M-Tek To Your Watchlist?

SAMYOUNG M-Tek's earnings per share have taken off like a rocket aimed right at the moon. That EPS growth certainly has my attention, and the large insider ownership only serves to further stoke my interest. At times fast EPS growth is a sign the business has reached an inflection point; and I do like those. So yes, on this short analysis I do think it's worth considering SAMYOUNG M-Tek for a spot on your watchlist. What about risks? Every company has them, and we've spotted 2 warning signs for SAMYOUNG M-Tek you should know about.

Of course, you can do well (sometimes) buying stocks that are not growing earnings and do not have insiders buying shares. But as a growth investor I always like to check out companies that do have those features. You can access a free list of them here.

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. 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.
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