Here's Why I Think Taegu Broadcasting (KOSDAQ:033830) Is An Interesting Stock

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. But as Peter Lynch said in One Up On Wall Street, 'Long shots almost never pay off.'

If, on the other hand, you like companies that have revenue, and even earn profits, then you may well be interested in Taegu Broadcasting (KOSDAQ:033830). Now, I'm not saying that the stock is necessarily undervalued today; but I can't shake an appreciation for the profitability of the business itself. In comparison, loss making companies act like a sponge for capital - but unlike such a sponge they do not always produce something when squeezed.

View our latest analysis for Taegu Broadcasting

How Quickly Is Taegu Broadcasting Increasing Earnings Per Share?

The market is a voting machine in the short term, but a weighing machine in the long term, so share price follows earnings per share (EPS) eventually. Therefore, there are plenty of investors who like to buy shares in companies that are growing EPS. Over the last three years, Taegu Broadcasting has grown EPS by 14% per year. That's a pretty good rate, if the company can sustain it.

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. This approach makes Taegu Broadcasting look pretty good, on balance; although revenue is flattish, EBIT margins improved from 5.7% to 11% in the last year. That's something to smile about.

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 Taegu Broadcasting is no giant, with a market capitalization of ₩135b, so you should definitely check its cash and debt before getting too excited about its prospects.

Are Taegu Broadcasting Insiders Aligned With All Shareholders?

I like company leaders to have some skin in the game, so to speak, because it increases alignment of incentives between the people running the business, and its true owners. So it is good to see that Taegu Broadcasting insiders have a significant amount of capital invested in the stock. Indeed, they hold ₩14b worth of its stock. That shows significant buy-in, and may indicate conviction in the business strategy. That amounts to 10% of the company, demonstrating a degree of high-level alignment with shareholders.

Should You Add Taegu Broadcasting To Your Watchlist?

As I already mentioned, Taegu Broadcasting 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. Still, you should learn about the 1 warning sign we've spotted with Taegu Broadcasting .

Although Taegu Broadcasting certainly looks good to me, I would like it more if insiders were buying up shares. If you like to see insider buying, too, then this free list of growing companies that insiders are buying, could be exactly what you're looking for.

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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