With EPS Growth And More, International Cement Group (SGX:KUO) Is Interesting

Like a puppy chasing its tail, some new investors often chase 'the next big thing', even if that means buying 'story stocks' without revenue, let alone profit. Unfortunately, high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson.

In contrast to all that, I prefer to spend time on companies like International Cement Group (SGX:KUO), which has not only revenues, but also profits. While that doesn't make the shares worth buying at any price, you can't deny that successful capitalism requires profit, eventually. While a well funded company may sustain losses for years, unless its owners have an endless appetite for subsidizing the customer, it will need to generate a profit eventually, or else breathe its last breath.

Check out our latest analysis for International Cement Group

How Fast Is International Cement Group Growing Its Earnings Per Share?

Even with very modest growth rates, a company will usually do well if it improves earnings per share (EPS) year after year. So EPS growth can certainly encourage an investor to take note of a stock. International Cement Group has grown its trailing twelve month EPS from S$0.0028 to S$0.0029, in the last year. That amounts to a small improvement of 4.5%.

One way to double-check a company's growth is to look at how its revenue, and earnings before interest and tax (EBIT) margins are changing. While we note International Cement Group's EBIT margins were flat over the last year, revenue grew by a solid 14% to S$137m. That's progress.

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.

International Cement Group isn't a huge company, given its market capitalization of S$356m. That makes it extra important to check on its balance sheet strength.

Are International Cement Group Insiders Aligned With All Shareholders?

Like that fresh smell in the air when the rains are coming, insider buying fills me with optimistic anticipation. That's because insider buying often indicates that those closest to the company have confidence that the share price will perform well. However, small purchases are not always indicative of conviction, and insiders don't always get it right.

International Cement Group top brass are certainly in sync, not having sold any shares, over the last year. But my excitement comes from the S$80k that Executive Director Beng Hua Chng spent buying shares (at an average price of about S$0.032).

Along with the insider buying, another encouraging sign for International Cement Group is that insiders, as a group, have a considerable shareholding. Indeed, they hold S$32m worth of its stock. That's a lot of money, and no small incentive to work hard. That amounts to 9.0% of the company, demonstrating a degree of high-level alignment with shareholders.

Does International Cement Group Deserve A Spot On Your Watchlist?

One positive for International Cement Group is that it is growing EPS. That's nice to see. Better yet, insiders are significant shareholders, and have been buying more shares. That makes the company a prime candidate for my watchlist - and arguably a research priority. You should always think about risks though. Case in point, we've spotted 1 warning sign for International Cement Group you should be aware of.

The good news is that International Cement Group is not the only growth stock with insider buying. Here's a list of them... with insider buying in the last three months!

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. 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.
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