With EPS Growth And More, Malaysia Smelting Corporation Berhad (KLSE: MSC) is interesting

Some have more money than common sense, they say, so even companies with no income, no profit, and a history of default can easily find investors. But as Peter Lynch put it in One Up on Wall Street, ‘Long shots hardly ever pay off.’

If, on the other hand, you like businesses that have revenue, and even profits, then you might be interested in Malaysia Smelting Corporation Berhad (KLSE: MSC). Even if stocks are fully valued today, most capitalists would recognize its benefits as a demonstration of constant value generation. In comparison, loss-making companies act like a sponge for capital – but unlike such a sponge, they don’t always produce something when in a hurry.

Check out our latest review for Malaysia Smelting Corporation Berhad

How fast is Malaysia Smelting Corporation Berhad increasing earnings per share?

In business, but not in life, profit is a key measure of success; and stock prices tend to reflect earnings per share (EPS). So like the hint of a smile on a face I love, growing EPS usually makes me look twice. It is therefore astonishing that Malaysia Smelting Corporation Berhad’s BPA increased from RM 0.022 to RM 0.13 in just one year. While this rate of growth is unlikely to repeat itself, it does look like a breakout improvement.

One way to check how a business is growing is to look at how its income and profit before interest and tax (EBIT) have changed. While revenues appear a bit flat, the good news is that EBIT margins have improved 3.6 percentage points to 9.5% over the past twelve months. It’s something to smile about.

In the graph below, you can see how the business has increased its profit and revenue over time. To see the actual numbers, click on the graph.

KLSE: MSC Revenue and Revenue History June 5, 2021

Since Malaysia Smelting Corporation Berhad is not a giant, with a market cap of RM860million, so you should definitely check its cash flow and debt. before too excited about his prospects.

Are Malaysia Smelting Corporation Berhad Insiders Aligned With All Shareholders?

I like that business leaders have some skin in the game, so to speak, because it increases the alignment of incentives between the people who run the business and its real owners. So it is good to see that Malaysia Smelting Corporation Berhad insiders have significant capital invested in the stock. Indeed, they hold 61 million RM of its stock. That’s a lot of money, and that’s no small incentive to work hard. These holdings represent more than 7.1% of the company; skin visible in the game.

Is Malaysia Smelting Corporation Berhad Worth Watching?

Malaysia Smelting Corporation Berhad’s earnings per share growth levitated, like a mountain goat scaling the Alps. This BPA growth certainly has my attention, and the large insider ownership only serves to pique my interest further. The hope is, of course, that the strong growth marks a fundamental improvement in the business economy. So, in my opinion, the Malaysia Smelting Corporation Berhad deserves to be put on your watch list; after all, shareholders do well when the market underestimates fast-growing companies. However, before you get too excited, we found out 4 warning signs for Malaysia Smelting Corporation Berhad (3 shouldn’t be ignored!) That you should be aware of.

Of course, you can (sometimes) buy stocks that are not growing income and do not have insiders who buy stocks. But as a growth investor, I always like to check out companies that do have these characteristics. You can access a free list of them here.

Please note that the insider dealing discussed in this article refers to reportable trades in the relevant jurisdiction.

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This Simply Wall St article is general in nature. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in any of the stocks mentioned.
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