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 currently lacks a track record of revenue and profit. Unfortunately, these high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson. A loss-making company is yet to prove itself with profit, and eventually the inflow of external capital may dry up.
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 Shin Yang Shipping Corporation Berhad (KLSE:SYSCORP). Now this is not to say that the company presents the best investment opportunity around, but profitability is a key component to success in business.
See our latest analysis for Shin Yang Shipping Corporation Berhad
How Fast Is Shin Yang Shipping Corporation Berhad Growing Its Earnings Per Share?
Strong earnings per share (EPS) results are an indicator of a company achieving solid profits, which investors look upon favourably and so the share price tends to reflect great EPS performance. So a growing EPS generally brings attention to a company in the eyes of prospective investors. Commendations have to be given in seeing that Shin Yang Shipping Corporation Berhad grew its EPS from RM0.032 to RM0.18, in one short year. When you see earnings grow that quickly, it often means good things ahead for the company. This could point to the business hitting a point of inflection.
Careful consideration of revenue growth and earnings before interest and taxation (EBIT) margins can help inform a view on the sustainability of the recent profit growth. The good news is that Shin Yang Shipping Corporation Berhad is growing revenues, and EBIT margins improved by 15.1 percentage points to 22%, over the last year. Both of which are great metrics to check off for potential growth.
The chart below shows how the company's bottom and top lines have progressed over time. Click on the chart to see the exact numbers.
Shin Yang Shipping Corporation Berhad isn't a huge company, given its market capitalisation of RM620m. That makes it extra important to check on its balance sheet strength.
Are Shin Yang Shipping Corporation Berhad Insiders Aligned With All Shareholders?
It should give investors a sense of security owning shares in a company if insiders also own shares, creating a close alignment their interests. Shareholders will be pleased by the fact that insiders own Shin Yang Shipping Corporation Berhad shares worth a considerable sum. To be specific, they have RM110m worth of shares. That's a lot of money, and no small incentive to work hard. Those holdings account for over 18% of the company; visible skin in the game.