Some have more dollars than sense, they say, so even companies that have no revenue, no profit, and a record of falling short, can easily find investors. Unfortunately, high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson.
If, on the other hand, you like companies that have revenue, and even earn profits, then you may well be interested in T.S. Investment (KOSDAQ:246690). While profit is not necessarily a social good, it's easy to admire a business that can consistently produce it. While a well funded company may sustain losses for years, unless its owners have an endless appetite for subsidizing the customer, it will need to generate a profit eventually, or else breathe its last breath.
T.S. Investment's Improving Profits
Even modest earnings per share growth (EPS) can create meaningful value, when it is sustained reliably from year to year. So EPS growth can certainly encourage an investor to take note of a stock. T.S. Investment boosted its trailing twelve month EPS from ₩189 to ₩224, in the last year. That's a 19% gain; respectable growth in the broader scheme of things.
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. Not all of T.S. Investment's revenue this year is revenue from operations, so keep in mind the revenue and margin numbers I've used might not be the best representation of the underlying business. While we note T.S. Investment's EBIT margins were flat over the last year, revenue grew by a solid 12% to ₩12b. That's a real positive.
You can take a look at the company's revenue and earnings growth trend, in the chart below. Click on the chart to see the exact numbers.
T.S. Investment isn't a huge company, given its market capitalization of ₩84b. That makes it extra important to check on its balance sheet strength.
Are T.S. Investment 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. So it is good to see that T.S. Investment insiders have a significant amount of capital invested in the stock. Indeed, they hold ₩25b worth of its stock. That shows significant buy-in, and may indicate conviction in the business strategy. Those holdings account for over 30% of the company; visible skin in the game.
Is T.S. Investment Worth Keeping An Eye On?
As I already mentioned, T.S. Investment is a growing business, which is what I like to see. If that's not enough on its own, there is also the rather notable levels of insider ownership. The combination sparks joy for me, so I'd consider keeping the company on a watchlist. Before you take the next step you should know about the 2 warning signs for T.S. Investment that we have uncovered.
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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