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For beginners, it can seem like a good idea (and an exciting prospect) to buy a company that tells a good story to investors, even if it completely lacks a track record of revenue and profit. And in their study titled Who Falls Prey to the Wolf of Wall Street?' Leuz et. al. found that it is 'quite common' for investors to lose money by buying into 'pump and dump' schemes.
So if you're like me, you might be more interested in profitable, growing companies, like Fujikon Industrial Holdings (HKG:927). While that doesn't make the shares worth buying at any price, you can't deny that successful capitalism requires profit, eventually. 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 Fujikon Industrial Holdings
How Fast Is Fujikon Industrial Holdings Growing Its Earnings Per Share?
In the last three years Fujikon Industrial Holdings's earnings per share took off like a rocket; fast, and from a low base. So the actual rate of growth doesn't tell us much. Thus, it makes sense to focus on more recent growth rates, instead. Fujikon Industrial Holdings has grown its trailing twelve month EPS from HK$0.094 to HK$0.10, in the last year. That amounts to a small improvement of 9.1%.
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. Fujikon Industrial Holdings maintained stable EBIT margins over the last year, all while growing revenue 8.3% to HK$1.3b. That's progress.
In the chart below, you can see how the company has grown earnings, and revenue, over time. For finer detail, click on the image.
Fujikon Industrial Holdings isn't a huge company, given its market capitalization of HK$490m. That makes it extra important to check on its balance sheet strength.
Are Fujikon Industrial Holdings Insiders Aligned With All Shareholders?
Like standing at the lookout, surveying the horizon at sunrise, insider buying, for some investors, sparks joy. Because oftentimes, the purchase of stock is a sign that the buyer views it as undervalued. However, small purchases are not always indicative of conviction, and insiders don't always get it right.
Not only did Fujikon Industrial Holdings insiders refrain from selling stock during the year, but they also spent HK$1.2m buying it. That's nice to see, because it suggests insiders are optimistic. We also note that it was the Co-Founder, Chi Hung Yeung, who made the biggest single acquisition, paying HK$513k for shares at about HK$1.21 each.