If EPS Growth Is Important To You, Hyosung Heavy Industries (KRX:298040) Presents An Opportunity

The excitement of investing in a company that can reverse its fortunes is a big draw for some speculators, so even companies that have no revenue, no profit, and a record of falling short, can manage to find investors. 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.

In contrast to all that, many investors prefer to focus on companies like Hyosung Heavy Industries (KRX:298040), which has not only revenues, but also profits. Now this is not to say that the company presents the best investment opportunity around, but profitability is a key component to success in business.

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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. In impressive fashion, Hyosung Heavy Industries' EPS grew from ₩16,444 to ₩32,554, over the previous 12 months. Year on year growth of 98% is certainly a sight to behold.

Careful consideration of revenue growth and earnings before interest and taxation (EBIT) margins can help inform a view on the sustainability of the recent profit growth. While we note Hyosung Heavy Industries achieved similar EBIT margins to last year, revenue grew by a solid 12% to ₩5.0t. That's a real positive.

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

See 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?

Since Hyosung Heavy Industries has a market capitalisation of ₩8.3t, we wouldn't expect insiders to hold a large percentage of shares. But we are reassured by the fact they have invested in the company. Notably, they have an enviable stake in the company, worth ₩952b. Investors will appreciate management having this amount of skin in the game as it shows their commitment to the company's future.

Is Hyosung Heavy Industries Worth Keeping An Eye On?

Hyosung Heavy Industries' earnings have taken off in quite an impressive fashion. That sort of growth is nothing short of eye-catching, and the large investment held by insiders should certainly brighten the view of the company. At times fast EPS growth is a sign the business has reached an inflection point, so there's a potential opportunity to be had here. Based on the sum of its parts, we definitely think its worth watching Hyosung Heavy Industries very closely. If you think Hyosung Heavy Industries might suit your style as an investor, you could go straight to its annual report, or you could first check our discounted cash flow (DCF) valuation for the company.

Although Hyosung Heavy Industries 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 South Korean 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.