Here's Why I Think SEOWONINTECH.Co.Ltd (KOSDAQ:093920) 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 Warren Buffett has mused, 'If you've been playing poker for half an hour and you still don't know who the patsy is, you're the patsy.' When they buy such story stocks, investors are all too often the patsy.

In the age of tech-stock blue-sky investing, my choice may seem old fashioned; I still prefer profitable companies like SEOWONINTECH.Co.Ltd (KOSDAQ:093920). While that doesn't make the shares worth buying at any price, you can't deny that successful capitalism requires profit, eventually. Loss-making companies are always racing against time to reach financial sustainability, but time is often a friend of the profitable company, especially if it is growing.

See our latest analysis for SEOWONINTECH.Co.Ltd

SEOWONINTECH.Co.Ltd's Improving Profits

In the last three years SEOWONINTECH.Co.Ltd'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. As a result, I'll zoom in on growth over the last year, instead. SEOWONINTECH.Co.Ltd has grown its trailing twelve month EPS from ₩900 to ₩942, in the last year. That amounts to a small improvement of 4.6%.

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 SEOWONINTECH.Co.Ltd's EBIT margins were flat over the last year, revenue grew by a solid 6.9% to ₩316b. 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 SEOWONINTECH.Co.Ltd is no giant, with a market capitalization of ₩146b, so you should definitely check its cash and debt before getting too excited about its prospects.

Are SEOWONINTECH.Co.Ltd Insiders Aligned With All Shareholders?

Many consider high insider ownership to be a strong sign of alignment between the leaders of a company and the ordinary shareholders. So as you can imagine, the fact that SEOWONINTECH.Co.Ltd insiders own a significant number of shares certainly appeals to me. Indeed, with a collective holding of 52%, company insiders are in control and have plenty of capital behind the venture. This makes me think they will be incentivised to plan for the long term - something I like to see. In terms of absolute value, insiders have ₩76b invested in the business, using the current share price. That should be more than enough to keep them focussed on creating shareholder value!

Does SEOWONINTECH.Co.Ltd Deserve A Spot On Your Watchlist?

As I already mentioned, SEOWONINTECH.Co.Ltd is a growing business, which is what I like to see. Just as polish makes silverware pop, the high level of insider ownership enhances my enthusiasm for this growth. That combination appeals to me, for one. So yes, I do think the stock is worth keeping an eye on. Even so, be aware that SEOWONINTECH.Co.Ltd is showing 1 warning sign in our investment analysis , you should know about...

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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