With EPS Growth And More, Alexander Marine (TWSE:8478) Makes An Interesting Case

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. Unfortunately, these high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson. A loss-making company is yet to prove itself with profit, and eventually the inflow of external capital may dry up.

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 Alexander Marine (TWSE:8478). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Alexander Marine with the means to add long-term value to shareholders.

See our latest analysis for Alexander Marine

How Fast Is Alexander Marine Growing Its Earnings Per Share?

Alexander Marine 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. As a result, we'll zoom in on growth over the last year, instead. It's good to see that Alexander Marine's EPS has grown from NT$19.93 to NT$23.66 over twelve months. That's a 19% gain; respectable growth in the broader scheme of things.

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. EBIT margins for Alexander Marine remained fairly unchanged over the last year, however the company should be pleased to report its revenue growth for the period of 14% to NT$6.3b. That's a real positive.

You can take a look at the company's revenue and earnings growth trend, in the chart below. Click on the chart to see the exact numbers.

While it's always good to see growing profits, you should always remember that a weak balance sheet could come back to bite. So check Alexander Marine's balance sheet strength, before getting too excited.

Are Alexander Marine Insiders Aligned With All Shareholders?

It's pleasing to see company leaders with putting their money on the line, so to speak, because it increases alignment of incentives between the people running the business, and its true owners. Shareholders will be pleased by the fact that insiders own Alexander Marine shares worth a considerable sum. We note that their impressive stake in the company is worth NT$9.5b. That equates to 28% of the company, making insiders powerful and aligned with other shareholders. Looking very optimistic for investors.

Should You Add Alexander Marine To Your Watchlist?

One positive for Alexander Marine is that it is growing EPS. That's nice to see. For those who are looking for a little more than this, the high level of insider ownership enhances our enthusiasm for this growth. These two factors are a huge highlight for the company which should be a strong contender your watchlists. What about risks? Every company has them, and we've spotted 3 warning signs for Alexander Marine (of which 1 doesn't sit too well with us!) you should know about.

While opting for stocks without growing earnings and absent insider buying can yield results, for investors valuing these key metrics, here is a carefully selected list of companies in TW with promising growth potential and insider confidence.

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.