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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 Warren Buffett has mused, 'If you've been playing poker for half an hour and you still don't know who the patsy is, you're the patsy.' When they buy such story stocks, investors are all too often the patsy.
If, on the other hand, you like companies that have revenue, and even earn profits, then you may well be interested in Shandong Weigao Group Medical Polymer (HKG:1066). While profit is not necessarily a social good, it's easy to admire a business than can consistently produce it. In comparison, loss making companies act like a sponge for capital - but unlike such a sponge they do not always produce something when squeezed.
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Check out our latest analysis for Shandong Weigao Group Medical Polymer
How Fast Is Shandong Weigao Group Medical Polymer 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). That means EPS growth is considered a real positive by most successful long-term investors. We can see that in the last three years Shandong Weigao Group Medical Polymer grew its EPS by 9.8% per year. That growth rate is fairly good, assuming the company can keep it up.
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. While we note Shandong Weigao Group Medical Polymer's EBIT margins were flat over the last year, revenue grew by a solid 40% to CN¥8.8b. That's progress.
You can take a look at the company's revenue and earnings growth trend, in the chart below. For finer detail, click on the image.
The trick, as an investor, is to find companies that are going to perform well in the future, not just in the past. To that end, right now and today, you can check our visualization of consensus analyst forecasts for future Shandong Weigao Group Medical Polymer EPS 100% free.
Are Shandong Weigao Group Medical Polymer Insiders Aligned With All Shareholders?
I like company leaders to have some skin in the game, so to speak, because it increases alignment of incentives between the people running the business, and its true owners. So it is good to see that Shandong Weigao Group Medical Polymer insiders have a significant amount of capital invested in the stock. With a whopping CN¥479m worth of shares as a group, insiders have plenty riding on the company's success. This should keep them focused on creating long term value for shareholders.