We Ran A Stock Scan For Earnings Growth And K. Seng Seng Corporation Berhad (KLSE:KSSC) Passed With Ease

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. But the reality is that when a company loses money each year, for long enough, its investors will usually take their share of those losses. 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 this doesn't necessarily speak to whether it's undervalued, the profitability of the business is enough to warrant some appreciation - especially if its growing.

See our latest analysis for K. Seng Seng Corporation Berhad

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

In business, profits are a key measure of success; and share prices tend to reflect earnings per share (EPS) performance. Which is why EPS growth is looked upon so favourably. It is awe-striking that K. Seng Seng Corporation Berhad's EPS went from RM0.0095 to RM0.087 in just one year. Even though that growth rate may not be repeated, that looks like a breakout improvement. Could this be a sign that the business has reached an inflection point?

It's often helpful to take a look at earnings before interest and tax (EBIT) margins, as well as revenue growth, to get another take on the quality of the company's growth. The good news is that K. Seng Seng Corporation Berhad is growing revenues, and EBIT margins improved by 6.0 percentage points to 10%, 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.

Since K. Seng Seng Corporation Berhad is no giant, with a market capitalisation of RM76m, 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 those who are interested in K. Seng Seng Corporation Berhad will be delighted to know that insiders have shown their belief, holding a large proportion of the company's shares. Indeed, with a collective holding of 52%, company insiders are in control and have plenty of capital behind the venture. This should be seen as a good thing, as it means insiders have a personal interest in delivering the best outcomes for shareholders. Although, with K. Seng Seng Corporation Berhad being valued at RM76m, this is a small company we're talking about. So this large proportion of shares owned by insiders only amounts to RM39m. This isn't an overly large holding but it should still keep the insiders motivated to deliver the best outcomes for shareholders.

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

K. Seng Seng Corporation Berhad's earnings have taken off in quite an impressive fashion. That sort of growth is nothing short of eye-catching, and the large investment held by insiders should certainly brighten the view of the company. The hope is, of course, that the strong growth marks a fundamental improvement in the business economics. So based on this quick analysis, we do think it's worth considering K. Seng Seng Corporation Berhad for a spot on your watchlist. We should say that we've discovered 3 warning signs for K. Seng Seng Corporation Berhad (2 shouldn't be ignored!) that you should be aware of before investing here.

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 free list of them here.

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.