We Run a Stock Analysis for Earnings Growth and Easily Approved Tex Cycle Technology (M) Berhad (KLSE:TEXCYCL)
The excitement of investing in a company that can reverse its fortunes is a big attraction for some speculators, so even companies that have no revenue, no profit and a history of failure can find investors. But the reality is that when a company loses money each year for long enough, its investors usually take their share of those losses. Loss-making companies are always racing against time to achieve financial sustainability, so investors in these companies may be taking on more risk than they should.
In contrast to all this, many investors prefer to focus on companies like Tex Cycle Technology (M) Berhad (KLSE:TEXCYCL), which not only generates revenue but also profits. While profit isn’t the only metric you should consider when investing, it’s worth recognizing companies that can consistently produce it.
See our latest analysis for Tex Cycle Technology (M) Berhad
How fast is Tex Cycle (M) Berhad technology growing?
Generally, companies that experience growth in earnings per share (EPS) should see similar trends in their share price. Therefore, it makes sense for experienced investors to pay close attention to a company’s earnings per share when conducting investment research. Tex Cycle Technology (M) Berhad shareholders have plenty of reasons to be happy, as its annual EPS growth over the last 3 years has been 52%. While this kind of growth rate isn’t sustainable for long, it certainly catches the attention of potential investors.
Revenue growth is an excellent indicator that growth is sustainable and, combined with a high earnings before interest and tax (EBIT) margin, is an excellent way for a company to maintain a competitive advantage in the market. Unfortunately, revenue fell and so did margins. This will not make it easier to increase profits, to say the least.
The chart below shows how the company’s top and bottom lines have progressed over time. Click on the graph to see the exact numbers.
Since Tex Cycle Technology (M) Berhad is not a giant, with a market capitalization of RM322 million, you should definitely check its cash and debt before getting very excited about its prospects.
Are Tex Cycle Technology (M) Berhad Insiders aligned with all shareholders?
It is necessary for company leaders to act in the best interests of shareholders and, therefore, internal investment always constitutes a guarantee for the market. So it’s good to see that Tex Cycle Technology (M) Berhad insiders have a significant amount of capital invested in the stock. In fact, his stake is valued at RM110 million. This considerable investment should help generate long-term value in the business. These holdings represent more than 34% of the company; Visible skin in the game.
Is Tex Cycle Technology (M) Berhad worth keeping an eye on?
Tex Cycle Technology (M) Berhad’s earnings per share have been soaring, with very high growth rates. This level of EPS growth does wonders for attracting investment, and the large internal investment in the company is just the icing on the cake. Sometimes rapid EPS growth is a sign that the business has reached an inflection point, so there is a potential opportunity here. So, on a surface level, it’s worth putting Tex Cycle Technology (M) Berhad on your watch list; After all, shareholders do well when the market undervalues fast-growing companies. We should say we discovered 3 Warning Signs for Tex Cycle Technology (M) Berhad (1 is a bit unpleasant!) that you should know before investing here.
There is always the possibility of doing well by buying shares that they are not increasing earnings and no have insiders buying shares. But for those who consider these metrics important, we encourage you to check out companies that to do has these features. You can access a personalized list of Malaysian companies that have demonstrated growth supported by significant insider ownership.
Please note that the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take into account your objectives or your financial situation. Our goal is to bring you long-term focused analysis driven by fundamental data. Please note that our analysis may not take into account the latest price-sensitive company announcements or qualitative materials. Simply Wall St has no position in any of the stocks mentioned.
Do you have feedback on this article? Worried about the content? Please contact us directly. Alternatively, email editorial-team@simplywallst.com
