Here's Why We Think Global Brands Manufacture (TPE:6191) Is Well Worth Watching

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. But as Peter Lynch said in One Up On Wall Street, 'Long shots almost never pay off.'

In the age of tech-stock blue-sky investing, my choice may seem old fashioned; I still prefer profitable companies like Global Brands Manufacture (TPE:6191). Even if the shares are fully valued today, most capitalists would recognize its profits as the demonstration of steady value generation. In comparison, loss making companies act like a sponge for capital - but unlike such a sponge they do not always produce something when squeezed.

Check out our latest analysis for Global Brands Manufacture

How Fast Is Global Brands Manufacture Growing Its Earnings Per Share?

Over the last three years, Global Brands Manufacture has grown earnings per share (EPS) like young bamboo after rain; fast, and from a low base. So I don't think the percent growth rate is particularly meaningful. As a result, I'll zoom in on growth over the last year, instead. Like the last firework on New Year's Eve accelerating into the sky, Global Brands Manufacture's EPS shot from NT$1.84 to NT$4.53, over the last year. Year on year growth of 146% is certainly a sight to behold.

I like to take a look at earnings before interest and (EBIT) tax margins, as well as revenue growth, to get another take on the quality of the company's growth. Global Brands Manufacture shareholders can take confidence from the fact that EBIT margins are up from 5.4% to 12%, and revenue is growing. That's great to see, on both counts.

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.

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 Global Brands Manufacture's balance sheet strength, before getting too excited.

Are Global Brands Manufacture Insiders Aligned With All Shareholders?

Does Global Brands Manufacture Deserve A Spot On Your Watchlist?

Global Brands Manufacture's earnings per share growth have been levitating higher, like a mountain goat scaling the Alps. We should say that we've discovered 2 warning signs for Global Brands Manufacture that you should be aware of before investing here.

Of course, you can do well (sometimes) buying stocks that are not growing earnings and do not have insiders buying shares. But as a growth investor I always like 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. 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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