Is Now The Time To Put K. Seng Seng Corporation Berhad (KLSE:KSSC) On Your Watchlist?

Investors are often guided by the idea of discovering 'the next big thing', even if that means buying 'story stocks' without any revenue, let alone profit. 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. While a well funded company may sustain losses for years, it will need to generate a profit eventually, or else investors will move on and the company will wither away.

In contrast to all that, many investors prefer to focus on companies like K. Seng Seng Corporation Berhad (KLSE:KSSC), which has not only revenues, but also profits. While profit isn't the sole metric that should be considered when investing, it's worth recognising businesses that can consistently produce it.

See our latest analysis for K. Seng Seng Corporation Berhad

How Fast Is K. Seng Seng Corporation Berhad Growing Its Earnings Per Share?

K. Seng Seng Corporation Berhad has undergone a massive growth in earnings per share over the last three years. So much so that this three year growth rate wouldn't be a fair assessment of the company's future. Thus, it makes sense to focus on more recent growth rates, instead. K. Seng Seng Corporation Berhad boosted its trailing twelve month EPS from RM0.045 to RM0.052, in the last year. That's a 17% gain; respectable growth in the broader scheme of things.

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. While we note K. Seng Seng Corporation Berhad achieved similar EBIT margins to last year, revenue grew by a solid 40% to RM198m. That's a real positive.

In the chart below, you can see how the company has grown earnings and revenue, over time. Click on the chart to see the exact numbers.

Since K. Seng Seng Corporation Berhad is no giant, with a market capitalisation of RM210m, you should definitely check its cash and debt before getting too excited about its prospects.

Are K. Seng Seng Corporation Berhad 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 K. Seng Seng Corporation Berhad insiders own a significant number of shares certainly is appealing. Owning 44% of the company, insiders have plenty riding on the performance of the the share price. This should be a welcoming sign for investors because it suggests that the people making the decisions are also impacted by their choices. In terms of absolute value, insiders have RM92m invested in the business, at the current share price. That's nothing to sneeze at!

Is K. Seng Seng Corporation Berhad Worth Keeping An Eye On?

One positive for K. Seng Seng Corporation 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. The combination definitely favoured by investors so consider keeping the company on a watchlist. Before you take the next step you should know about the 3 warning signs for K. Seng Seng Corporation Berhad (1 is concerning!) that we have uncovered.

Although K. Seng Seng Corporation Berhad certainly looks good, it may appeal to more investors if insiders were buying up shares. If you like to see insider buying, 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. 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.