Here's Why We Think Press Metal Aluminium Holdings Berhad (KLSE:PMETAL) Might Deserve Your Attention Today

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. 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.

Despite being in the age of tech-stock blue-sky investing, many investors still adopt a more traditional strategy; buying shares in profitable companies like Press Metal Aluminium Holdings Berhad (KLSE:PMETAL). 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.

View our latest analysis for Press Metal Aluminium Holdings Berhad

How Fast Is Press Metal Aluminium Holdings Berhad Growing?

If a company can keep growing earnings per share (EPS) long enough, its share price should eventually follow. So it makes sense that experienced investors pay close attention to company EPS when undertaking investment research. Press Metal Aluminium Holdings Berhad's shareholders have have plenty to be happy about as their annual EPS growth for the last 3 years was 43%. Growth that fast may well be fleeting, but it should be more than enough to pique the interest of the wary stock pickers.

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. EBIT margins for Press Metal Aluminium Holdings Berhad remained fairly unchanged over the last year, however the company should be pleased to report its revenue growth for the period of 43% to RM16b. That's a real positive.

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.

You don't drive with your eyes on the rear-view mirror, so you might be more interested in this free report showing analyst forecasts for Press Metal Aluminium Holdings Berhad's future profits.

Are Press Metal Aluminium Holdings Berhad Insiders Aligned With All Shareholders?

We would not expect to see insiders owning a large percentage of a RM42b company like Press Metal Aluminium Holdings Berhad. But we are reassured by the fact they have invested in the company. Notably, they have an enviable stake in the company, worth RM11b. This totals to 25% of shares in the company. Enough to lead management's decision making process down a path that brings the most benefit to shareholders. So there is opportunity here to invest in a company whose management have tangible incentives to deliver.

Is Press Metal Aluminium Holdings Berhad Worth Keeping An Eye On?

Press Metal Aluminium Holdings Berhad's earnings have taken off in quite an impressive fashion. This level of EPS growth does wonders for attracting investment, and the large insider investment in the company is just the cherry on top. 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 Press Metal Aluminium Holdings Berhad for a spot on your watchlist. However, before you get too excited we've discovered 1 warning sign for Press Metal Aluminium Holdings Berhad that you should be aware of.

Although Press Metal Aluminium Holdings 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.