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If You Like EPS Growth Then Check Out Aligned Genetics (KOSDAQ:238120) Before It's Too Late
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 completely lacks a track record of revenue and profit. But as Peter Lynch said in One Up On Wall Street, 'Long shots almost never pay off.'
In contrast to all that, I prefer to spend time on companies like Aligned Genetics (KOSDAQ:238120), which has not only revenues, but also profits. While that doesn't make the shares worth buying at any price, you can't deny that successful capitalism requires profit, eventually. 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.
See our latest analysis for Aligned Genetics
Aligned Genetics's Improving Profits
In the last three years Aligned Genetics's earnings per share took off like a rocket; fast, and from a low base. So the actual rate of growth doesn't tell us much. Thus, it makes sense to focus on more recent growth rates, instead. Like the last firework on New Year's Eve accelerating into the sky, Aligned Genetics's EPS shot from ₩32.22 to ₩90.00, over the last year. Year on year growth of 179% is certainly a sight to behold.
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. Aligned Genetics maintained stable EBIT margins over the last year, all while growing revenue 2.1% to ₩8.0b. 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.
Since Aligned Genetics is no giant, with a market capitalization of ₩59b, so you should definitely check its cash and debt before getting too excited about its prospects.
Are Aligned Genetics 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. As a result, I'm encouraged by the fact that insiders own Aligned Genetics shares worth a considerable sum. To be specific, they have ₩19b worth of shares. That's a lot of money, and no small incentive to work hard. That amounts to 32% of the company, demonstrating a degree of high-level alignment with shareholders.
Does Aligned Genetics Deserve A Spot On Your Watchlist?
Aligned Genetics's earnings have taken off like any random crypto-currency did, back in 2017. That EPS growth certainly has my attention, and the large insider ownership only serves to further stoke my interest. At times fast EPS growth is a sign the business has reached an inflection point; and I do like those. So yes, on this short analysis I do think it's worth considering Aligned Genetics for a spot on your watchlist. Still, you should learn about the 2 warning signs we've spotted with Aligned Genetics .
You can invest in any company you want. But if you prefer to focus on stocks that have demonstrated insider buying, here is a list of companies with insider buying in the last three months.
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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About KOSDAQ:A238120
Aligned Genetics
A biotech company, develops, manufactures, and sells imaging solutions for research institutions worldwide.
Solid track record with excellent balance sheet.