Should You Be Adding ITCENGLOBAL (KOSDAQ:124500) To Your Watchlist Today?

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. 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. Loss making companies can act like a sponge for capital - so investors should be cautious that they're not throwing good money after bad.

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 ITCENGLOBAL (KOSDAQ:124500). 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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ITCENGLOBAL's Improving Profits

Strong earnings per share (EPS) results are an indicator of a company achieving solid profits, which investors look upon favourably and so the share price tends to reflect great EPS performance. So a growing EPS generally brings attention to a company in the eyes of prospective investors. It's an outstanding feat for ITCENGLOBAL to have grown EPS from ₩51.33 to ₩506 in just one year. While it's difficult to sustain growth at that level, it bodes well for the company's outlook for the future. Could this be a sign that the business has reached an inflection point?

One way to double-check a company's growth is to look at how its revenue, and earnings before interest and tax (EBIT) margins are changing. While we note ITCENGLOBAL achieved similar EBIT margins to last year, revenue grew by a solid 82% to ₩5.7t. That's progress.

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.

View our latest analysis for ITCENGLOBAL

While it's always good to see growing profits, you should always remember that a weak balance sheet could come back to bite. So check ITCENGLOBAL's balance sheet strength, before getting too excited.

Are ITCENGLOBAL Insiders Aligned With All Shareholders?

It's a necessity that company leaders act in the best interest of shareholders and so insider investment always comes as a reassurance to the market. Shareholders will be pleased by the fact that insiders own ITCENGLOBAL shares worth a considerable sum. As a matter of fact, their holding is valued at ₩60b. This considerable investment should help drive long-term value in the business. Those holdings account for over 13% of the company; visible skin in the game.

Does ITCENGLOBAL Deserve A Spot On Your Watchlist?

ITCENGLOBAL's earnings per share growth have been climbing higher at an appreciable rate. That EPS growth certainly is attention grabbing, and the large insider ownership only serves to further stoke our interest. 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. So based on this quick analysis, we do think it's worth considering ITCENGLOBAL for a spot on your watchlist. What about risks? Every company has them, and we've spotted 1 warning sign for ITCENGLOBAL you should know about.

Although ITCENGLOBAL 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.