If EPS Growth Is Important To You, MNRB Holdings Berhad (KLSE:MNRB) Presents An Opportunity

It's common for many investors, especially those who are inexperienced, to buy shares in companies with a good story even if these companies are loss-making. Sometimes these stories can cloud the minds of investors, leading them to invest with their emotions rather than on the merit of good company fundamentals. Loss making companies can act like a sponge for capital - so investors should be cautious that they're not throwing good money after bad.

So if this idea of high risk and high reward doesn't suit, you might be more interested in profitable, growing companies, like MNRB Holdings Berhad (KLSE:MNRB). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide MNRB Holdings Berhad with the means to add long-term value to shareholders.

Check out our latest analysis for MNRB Holdings Berhad

How Fast Is MNRB Holdings Berhad Growing?

Generally, companies experiencing growth in earnings per share (EPS) should see similar trends in share price. That means EPS growth is considered a real positive by most successful long-term investors. We can see that in the last three years MNRB Holdings Berhad grew its EPS by 11% per year. That's a good rate of growth, if it can be sustained.

Careful consideration of revenue growth and earnings before interest and taxation (EBIT) margins can help inform a view on the sustainability of the recent profit growth. The good news is that MNRB Holdings Berhad is growing revenues, and EBIT margins improved by 5.6 percentage points to 11%, over the last year. Both of which are great metrics to check off for potential growth.

The chart below shows how the company's bottom and top lines have progressed over time. To see the actual numbers, click on the chart.

MNRB Holdings Berhad isn't a huge company, given its market capitalisation of RM1.3b. That makes it extra important to check on its balance sheet strength.

Are MNRB Holdings Berhad Insiders Aligned With All Shareholders?

It's pleasing to see company leaders with putting their money on the line, so to speak, because it increases alignment of incentives between the people running the business, and its true owners. Shareholders will be pleased by the fact that insiders own MNRB Holdings Berhad shares worth a considerable sum. Indeed, they hold RM184m worth of its stock. That shows significant buy-in, and may indicate conviction in the business strategy. As a percentage, this totals to 14% of the shares on issue for the business, an appreciable amount considering the market cap.

Does MNRB Holdings Berhad Deserve A Spot On Your Watchlist?

One positive for MNRB Holdings Berhad is that it is growing EPS. That's nice to see. If that's not enough on its own, there is also the rather notable levels of insider ownership. That combination is very appealing. So yes, we do think the stock is worth keeping an eye on. Even so, be aware that MNRB Holdings Berhad is showing 2 warning signs in our investment analysis , and 1 of those is a bit unpleasant...

While opting for stocks without growing earnings and absent insider buying can yield results, for investors valuing these key metrics, here is a carefully selected list of companies in MY with promising growth potential and insider confidence.

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.