Some have more dollars than sense, they say, so even companies that have no revenue, no profit, and a record of falling short, can easily find investors.But as Peter Lynch said in One Up On Wall Street, ‘Long shots almost never pay off.'” data-reactid=”18″>Some have more dollars than sense, they say, so even companies that have no revenue, no profit, and a record of falling short, can easily find investors.But as Peter Lynch said in One Up On Wall Street , ‘Long shots almost never pay off.’ So if you’re like me, you might be more interested in profitable, growing companies, like Yihai International Holding ( HKG:1579 ).While profit is not necessarily a social good, it’s easy to admire a business that can consistently produce it.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 Yihai International Holding Yihai International Holding’s Earnings Per Share Are Growing.As one of my mentors once told me, share price follows earnings per share (EPS).
Therefore, there are plenty of investors who like to buy shares in companies that are growing EPS.
I, for one, am blown away by the fact that Yihai International Holding has grown EPS by 44% per year, over the last three years.Growth that fast may well be fleeting, but like a lotus blooming from a murky pond, it sparks joy for the wary stock pickers.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.Yihai International Holding maintained stable EBIT margins over the last year, all while growing revenue 65% to CN¥3.3b.That’s a real positive.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 we live in the present moment at all times, there’s no doubt in my mind that the future matters more than the past.So why not check this interactive chart depicting future EPS estimates, for Yihai International Holding ? Are Yihai International Holding Insiders Aligned With All Shareholders? Many consider high insider ownership to be a strong sign of alignment between the leaders of a company and the ordinary shareholders.So as you can imagine, the fact that Yihai International Holding insiders own a significant number of shares certainly appeals to me.
Indeed, with a collective holding of 57%, company insiders are in control and have plenty of capital behind the venture.This makes me think they will be incentivised to plan for the long term – something I like to see.And their holding is extremely valuable at the current share price, totalling CN¥24b.
Now that’s what I call some serious skin in the game! Should You Add Yihai International Holding To Your Watchlist? Yihai International Holding’s earnings have taken off like any random crypto-currency did, back in 2017.That sort of growth is nothing short of eye-catching, and the large investment held by insiders certainly brightens my view of the company.The hope is, of course, that the strong growth marks a fundamental improvement in the business economics.
So to my mind Yihai International Holding is worth putting on your watchlist; after all, shareholders do well when the market underestimates fast growing companies.Of course, identifying quality businesses is only half the battle; investors need to know whether the stock is undervalued.So you might want to consider this free discounted cashflow valuation of Yihai International Holding.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 If you spot an error that warrants correction, please contact the editor at .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.Simply Wall St has no position in the stocks mentioned.We aim to bring you long-term focused research analysis driven by fundamental data.
Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.Thank you for reading..