Investors are often guided by the idea of discovering 'the next big thing', even if that means buying 'story stocks' without any revenue, let alone profit. But the reality is that when a company loses money each year, for long enough, its investors will usually take their share of those losses. Loss-making companies are always racing against time to reach financial sustainability, so investors in these companies may be taking on more risk than they should.
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 Supercomnet Technologies Berhad (KLSE:SCOMNET). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Supercomnet Technologies Berhad with the means to add long-term value to shareholders.
Check out our latest analysis for Supercomnet Technologies Berhad
Supercomnet Technologies Berhad's Earnings Per Share Are Growing
If you believe that markets are even vaguely efficient, then over the long term you'd expect a company's share price to follow its earnings per share (EPS) outcomes. Therefore, there are plenty of investors who like to buy shares in companies that are growing EPS. We can see that in the last three years Supercomnet Technologies Berhad grew its EPS by 13% per year. That growth rate is fairly good, assuming the company can keep it up.
One way to double-check a company's growth is to look at how its revenue, and earnings before interest and tax (EBIT) margins are changing. EBIT margins for Supercomnet Technologies Berhad remained fairly unchanged over the last year, however the company should be pleased to report its revenue growth for the period of 10% to RM158m. That's a real positive.
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.
The trick, as an investor, is to find companies that are going to perform well in the future, not just in the past. While crystal balls don't exist, you can check our visualization of consensus analyst forecasts for Supercomnet Technologies Berhad's future EPS 100% free.
Are Supercomnet Technologies Berhad 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 we're pleased to report that Supercomnet Technologies Berhad insiders own a meaningful share of the business. To be exact, company insiders hold 67% of the company, so their decisions have a significant impact on their investments. This makes it apparent they will be incentivised to plan for the long term - a positive for shareholders with a sit and hold strategy. With that sort of holding, insiders have about RM644m riding on the stock, at current prices. That should be more than enough to keep them focussed on creating shareholder value!