Here's Why I Think Innoprise Plantations Berhad (KLSE:INNO) Might Deserve Your Attention Today

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.

If, on the other hand, you like companies that have revenue, and even earn profits, then you may well be interested in Innoprise Plantations Berhad (KLSE:INNO). 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.

View our latest analysis for Innoprise Plantations Berhad

Innoprise Plantations Berhad's Earnings Per Share Are 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 Innoprise Plantations Berhad grew its EPS by 16% per year. That's a good rate of growth, if it can be sustained.

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. The good news is that Innoprise Plantations Berhad is growing revenues, and EBIT margins improved by 12.0 percentage points to 32%, over the last year. That's great to see, on both counts.

The chart below shows how the company's bottom and top lines have progressed over time. For finer detail, click on the image.

Innoprise Plantations Berhad isn't a huge company, given its market capitalization of RM517m. That makes it extra important to check on its balance sheet strength.

Are Innoprise Plantations Berhad Insiders Aligned With All Shareholders?

As a general rule, I think it worth considering how much the CEO is paid, since unreasonably high rates could be considered against the interests of shareholders. I discovered that the median total compensation for the CEOs of companies like Innoprise Plantations Berhad with market caps under RM823m is about RM576k.

The Innoprise Plantations Berhad CEO received total compensation of only RM1.0k in the year to . You could consider this pay as somewhat symbolic, which suggests the CEO does not need a lot of compensation to stay motivated. CEO compensation is hardly the most important aspect of a company to consider, but when its reasonable that does give me a little more confidence that leadership are looking out for shareholder interests. It can also be a sign of a culture of integrity, in a broader sense.

Does Innoprise Plantations Berhad Deserve A Spot On Your Watchlist?

One important encouraging feature of Innoprise Plantations Berhad is that it is growing profits. Not only that, but the CEO is paid quite reasonably, which makes me feel more trusting of the board of directors. So all in all I think it's worth at least considering for your watchlist. What about risks? Every company has them, and we've spotted 2 warning signs for Innoprise Plantations Berhad (of which 1 can't be ignored!) you should know about.

Although Innoprise Plantations 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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