Should You Be Adding HDC HOLDINGSLtd (KRX:012630) To Your Watchlist Today?

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

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 HDC HOLDINGSLtd (KRX:012630). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide HDC HOLDINGSLtd with the means to add long-term value to shareholders.

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How Fast Is HDC HOLDINGSLtd Growing Its Earnings Per Share?

Over the last three years, HDC HOLDINGSLtd has grown earnings per share (EPS) at as impressive rate from a relatively low point, resulting in a three year percentage growth rate that isn't particularly indicative of expected future performance. As a result, we'll zoom in on growth over the last year, instead. HDC HOLDINGSLtd's EPS shot up from ₩2,882 to ₩4,473; a result that's bound to keep shareholders happy. That's a impressive gain of 55%.

It's often helpful to take a look at earnings before interest and tax (EBIT) margins, as well as revenue growth, to get another take on the quality of the company's growth. HDC HOLDINGSLtd maintained stable EBIT margins over the last year, all while growing revenue 12% to ₩6.7t. That's encouraging news for the company!

You can take a look at the company's revenue and earnings growth trend, in the chart below. For finer detail, click on the image.

Check out our latest analysis for HDC HOLDINGSLtd

You don't drive with your eyes on the rear-view mirror, so you might be more interested in this free report showing analyst forecasts for HDC HOLDINGSLtd's future profits.

Are HDC HOLDINGSLtd Insiders Aligned With All Shareholders?

Seeing insiders owning a large portion of the shares on issue is often a good sign. Their incentives will be aligned with the investors and there's less of a probability in a sudden sell-off that would impact the share price. So we're pleased to report that HDC HOLDINGSLtd insiders own a meaningful share of the business. Owning 42% of the company, insiders have plenty riding on the performance of the the share price. This should be a welcoming sign for investors because it suggests that the people making the decisions are also impacted by their choices. At the current share price, that insider holding is worth a staggering ₩390b. That means they have plenty of their own capital riding on the performance of the business!

Does HDC HOLDINGSLtd Deserve A Spot On Your Watchlist?

You can't deny that HDC HOLDINGSLtd has grown its earnings per share at a very impressive rate. That's attractive. Further, the high level of insider ownership is impressive and suggests that the management appreciates the EPS growth and has faith in HDC HOLDINGSLtd's continuing strength. The growth and insider confidence is looked upon well and so it's worthwhile to investigate further with a view to discern the stock's true value. Even so, be aware that HDC HOLDINGSLtd is showing 2 warning signs in our investment analysis , and 1 of those can't be ignored...

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.