We Ran A Stock Scan For Earnings Growth And Press Metal Aluminium Holdings Berhad (KLSE:PMETAL) Passed With Ease
It's common for many investors, especially those who are inexperienced, to buy shares in companies with a good story even if these companies are loss-making. But as Peter Lynch said in One Up On Wall Street, 'Long shots almost never pay off.' Loss making companies can act like a sponge for capital - so investors should be cautious that they're not throwing good money after bad.
So if this idea of high risk and high reward doesn't suit, you might be more interested in profitable, growing companies, like Press Metal Aluminium Holdings Berhad (KLSE:PMETAL). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Press Metal Aluminium Holdings Berhad with the means to add long-term value to shareholders.
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Generally, companies experiencing growth in earnings per share (EPS) should see similar trends in share price. So it makes sense that experienced investors pay close attention to company EPS when undertaking investment research. Press Metal Aluminium Holdings Berhad managed to grow EPS by 14% per year, over three years. That's a pretty good rate, if the company can sustain it.
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 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 5.9% to RM15b. That's encouraging news for the company!
You can take a look at the company's revenue and earnings growth trend, in the chart below. To see the actual numbers, click on the chart.
View our latest analysis for Press Metal Aluminium Holdings Berhad
In investing, as in life, the future matters more than the past. So why not check out this free interactive visualization of Press Metal Aluminium Holdings Berhad's forecast profits?
Since Press Metal Aluminium Holdings Berhad has a market capitalisation of RM41b, we wouldn't expect insiders to hold a large percentage of shares. But we do take comfort from the fact that they are investors in the company. Indeed, they have a considerable amount of wealth invested in it, currently valued at RM9.5b. That equates to 23% of the company, making insiders powerful and aligned with other shareholders. So there is opportunity here to invest in a company whose management have tangible incentives to deliver.
It means a lot to see insiders invested in the business, but shareholders may be wondering if remuneration policies are in their best interest. A brief analysis of the CEO compensation suggests they are. For companies with market capitalisations over RM34b, like Press Metal Aluminium Holdings Berhad, the median CEO pay is around RM4.7m.
Press Metal Aluminium Holdings Berhad offered total compensation worth RM2.8m to its CEO in the year to December 2024. 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. Generally, arguments can be made that reasonable pay levels attest to good decision-making.
One important encouraging feature of Press Metal Aluminium Holdings Berhad is that it is growing profits. The growth of EPS may be the eye-catching headline for Press Metal Aluminium Holdings Berhad, but there's more to bring joy for shareholders. With company insiders aligning themselves considerably with the company's success and modest CEO compensation, there's no arguments that this is a stock worth looking into. Once you've identified a business you like, the next step is to consider what you think it's worth. And right now is your chance to view our exclusive discounted cashflow valuation of Press Metal Aluminium Holdings Berhad. You might benefit from giving it a glance today.
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 MY with promising growth potential and insider confidence.
Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.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.
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