Here's Why We Think Hyosung Heavy Industries (KRX:298040) Might Deserve Your Attention Today

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. 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. While a well funded company may sustain losses for years, it will need to generate a profit eventually, or else investors will move on and the company will wither away.

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 Hyosung Heavy Industries (KRX:298040). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Hyosung Heavy Industries with the means to add long-term value to shareholders.

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How Fast Is Hyosung Heavy Industries Growing Its Earnings Per Share?

In the last three years Hyosung Heavy Industries' 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. As a result, we'll zoom in on growth over the last year, instead. Impressively, Hyosung Heavy Industries' EPS catapulted from ₩14,468 to ₩38,624, over the last year. Year on year growth of 167% is certainly a sight to behold.

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. Hyosung Heavy Industries shareholders can take confidence from the fact that EBIT margins are up from 6.1% to 8.2%, and revenue is growing. Ticking those two boxes is a good sign of growth, in our book.

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

View our latest analysis for Hyosung Heavy Industries

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 Hyosung Heavy Industries' future profits.

Are Hyosung Heavy Industries Insiders Aligned With All Shareholders?

Owing to the size of Hyosung Heavy Industries, we wouldn't expect insiders to hold a significant proportion of the company. But we are reassured by the fact they have invested in the company. Notably, they have an enviable stake in the company, worth ₩4.3t. Coming in at 22% of the business, that holding gives insiders a lot of influence, and plenty of reason to generate value for shareholders. Very encouraging.

Does Hyosung Heavy Industries Deserve A Spot On Your Watchlist?

Hyosung Heavy Industries' earnings have taken off in quite an impressive fashion. 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 Hyosung Heavy Industries for a spot on your watchlist. You still need to take note of risks, for example - Hyosung Heavy Industries has 1 warning sign we think you should be aware of.

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.