Does Harrisons Holdings (Malaysia) Berhad (KLSE:HARISON) Deserve A Spot On Your Watchlist?

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. Unfortunately, high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson.

In the age of tech-stock blue-sky investing, my choice may seem old fashioned; I still prefer profitable companies like Harrisons Holdings (Malaysia) Berhad (KLSE:HARISON). Even if the shares are fully valued today, most capitalists would recognize its profits as the demonstration of steady value generation. Conversely, a loss-making company is yet to prove itself with profit, and eventually the sweet milk of external capital may run sour.

Check out our latest analysis for Harrisons Holdings (Malaysia) Berhad

How Fast Is Harrisons Holdings (Malaysia) Berhad Growing?

As one of my mentors once told me, share price follows earnings per share (EPS). It's no surprise, then, that I like to invest in companies with EPS growth. We can see that in the last three years Harrisons Holdings (Malaysia) Berhad grew its EPS by 6.7% per year. While that sort of growth rate isn't amazing, it does show the business is growing.

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. Harrisons Holdings (Malaysia) Berhad maintained stable EBIT margins over the last year, all while growing revenue 2.6% to RM1.8b. 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 Harrisons Holdings (Malaysia) Berhad is no giant, with a market capitalization of RM273m, so you should definitely check its cash and debt before getting too excited about its prospects.

Are Harrisons Holdings (Malaysia) Berhad Insiders Aligned With All Shareholders?

I always like to check up on CEO compensation, because I think that reasonable pay levels, around or below the median, can be a sign that shareholder interests are well considered. For companies with market capitalizations under RM814m, like Harrisons Holdings (Malaysia) Berhad, the median CEO pay is around RM585k.

The Harrisons Holdings (Malaysia) Berhad CEO received RM356k in compensation for the year ending . That seems pretty reasonable, especially given its below the median for similar sized companies. While the level of CEO compensation isn't a huge factor in my view of the company, modest remuneration is a positive, because it suggests that the board keeps shareholder interests in mind. I'd also argue reasonable pay levels attest to good decision making more generally.

Does Harrisons Holdings (Malaysia) Berhad Deserve A Spot On Your Watchlist?

One positive for Harrisons Holdings (Malaysia) Berhad is that it is growing EPS. That's nice to see. Not only that, but the CEO is paid quite reasonably, which makes me feel more trusting of the board of directors. So I do think the stock deserves further research, if not instant addition to your watchlist. Even so, be aware that Harrisons Holdings (Malaysia) Berhad is showing 2 warning signs in our investment analysis , you should know about...

Although Harrisons Holdings (Malaysia) Berhad 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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