If EPS Growth Is Important To You, Global Palm Resources Holdings (SGX:BLW) Presents An Opportunity

For beginners, it can seem like a good idea (and an exciting prospect) to buy a company that tells a good story to investors, even if it currently lacks a track record of revenue and 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.

If this kind of company isn't your style, you like companies that generate revenue, and even earn profits, then you may well be interested in Global Palm Resources Holdings (SGX:BLW). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Global Palm Resources Holdings with the means to add long-term value to shareholders.

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How Fast Is Global Palm Resources Holdings Growing Its Earnings Per Share?

In the last three years Global Palm Resources Holdings' earnings per share took off; so much so that it's a bit disingenuous to use these figures to try and deduce long term estimates. As a result, we'll zoom in on growth over the last year, instead. Global Palm Resources Holdings' EPS skyrocketed from Rp172 to Rp272, in just one year; a result that's bound to bring a smile to shareholders. That's a commendable gain of 58%.

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 Global Palm Resources Holdings is growing revenues, and EBIT margins improved by 18.4 percentage points to 30%, over the last year. Both of which are great metrics to check off for potential growth.

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 Global Palm Resources Holdings is no giant, with a market capitalisation of S$33m, you should definitely check its cash and debt before getting too excited about its prospects.

Are Global Palm Resources Holdings Insiders Aligned With All Shareholders?

Prior to investment, it's always a good idea to check that the management team is paid reasonably. Pay levels around or below the median, can be a sign that shareholder interests are well considered. Our analysis has discovered that the median total compensation for the CEOs of companies like Global Palm Resources Holdings with market caps under Rp3.1t is about Rp5.4b.

Global Palm Resources Holdings offered total compensation worth Rp3.7b to its CEO in the year to December 2021. That comes in below the average for similar sized companies and seems pretty reasonable. CEO compensation is hardly the most important aspect of a company to consider, but when it's reasonable, that gives a little more confidence that leadership are looking out for shareholder interests. It can also be a sign of a culture of integrity, in a broader sense.

Does Global Palm Resources Holdings Deserve A Spot On Your Watchlist?

You can't deny that Global Palm Resources Holdings has grown its earnings per share at a very impressive rate. That's attractive. The fast growth bodes well while the very reasonable CEO pay assists builds some confidence in the board. So this stock is well worth an addition to your watchlist as it has the potential to provide great value to shareholders. Even so, be aware that Global Palm Resources Holdings is showing 2 warning signs in our investment analysis , and 1 of those doesn't sit too well with us...

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.