Does Jaya Tiasa Holdings Berhad (KLSE:JTIASA) Deserve A Spot On Your Watchlist?

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. Unfortunately, these high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson. A loss-making company is yet to prove itself with profit, and eventually the inflow of external capital may dry up.

In contrast to all that, many investors prefer to focus on companies like Jaya Tiasa Holdings Berhad (KLSE:JTIASA), which has not only revenues, but also profits. 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.

Check out our latest analysis for Jaya Tiasa Holdings Berhad

How Fast Is Jaya Tiasa Holdings Berhad Growing Its Earnings Per Share?

Over the last three years, Jaya Tiasa Holdings Berhad has grown earnings per share (EPS) at as impressive rate from a relatively low point, resulting in a three year percentage growth rate that isn't particularly indicative of expected future performance. As a result, we'll zoom in on growth over the last year, instead. Jaya Tiasa Holdings Berhad's EPS shot up from RM0.15 to RM0.19; a result that's bound to keep shareholders happy. That's a impressive gain of 28%.

Top-line growth is a great indicator that growth is sustainable, and combined with a high earnings before interest and taxation (EBIT) margin, it's a great way for a company to maintain a competitive advantage in the market. Jaya Tiasa Holdings Berhad maintained stable EBIT margins over the last year, all while growing revenue 2.6% to RM895m. That's encouraging news for the company!

In the chart below, you can see how the company has grown earnings and revenue, over time. To see the actual numbers, click on the chart.

Since Jaya Tiasa Holdings Berhad is no giant, with a market capitalisation of RM1.1b, you should definitely check its cash and debt before getting too excited about its prospects.

Are Jaya Tiasa Holdings Berhad 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 Jaya Tiasa Holdings Berhad shares worth a considerable sum. As a matter of fact, their holding is valued at RM63m. This considerable investment should help drive long-term value in the business. Those holdings account for over 5.8% of the company; visible skin in the game.

Should You Add Jaya Tiasa Holdings Berhad To Your Watchlist?

If you believe that share price follows earnings per share you should definitely be delving further into Jaya Tiasa Holdings Berhad's strong EPS growth. This EPS growth rate is something the company should be proud of, and so it's no surprise that insiders are holding on to a considerable chunk of shares. The growth and insider confidence is looked upon well and so it's worthwhile to investigate further with a view to discern the stock's true value. Still, you should learn about the 2 warning signs we've spotted with Jaya Tiasa Holdings Berhad (including 1 which is a bit concerning).

There's always the possibility of doing well buying stocks that are not growing earnings and do not have insiders buying shares. But for those who consider these important metrics, we encourage you to check out companies that do have those features. You can access a tailored list of Malaysian companies which have demonstrated growth backed by recent insider purchases.

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.