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 Kim Loong Resources Berhad (KLSE:KMLOONG). While this doesn't necessarily speak to whether it's undervalued, the profitability of the business is enough to warrant some appreciation - especially if its growing.
View our latest analysis for Kim Loong Resources Berhad
Generally, companies experiencing growth in earnings per share (EPS) should see similar trends in share price. That makes EPS growth an attractive quality for any company. We can see that in the last three years Kim Loong Resources Berhad grew its EPS by 14% per year. That's a pretty good rate, if the company can sustain it.
It's often helpful to take a look at earnings before interest and tax (EBIT) margins, as well as revenue growth, to get another take on the quality of the company's growth. EBIT margins for Kim Loong Resources Berhad remained fairly unchanged over the last year, however the company should be pleased to report its revenue growth for the period of 4.0% to RM1.6b. That's encouraging news for the company!
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.
Fortunately, we've got access to analyst forecasts of Kim Loong Resources Berhad's future profits. You can do your own forecasts without looking, or you can take a peek at what the professionals are predicting.
It's pleasing to see company leaders with putting their money on the line, so to speak, because it increases alignment of incentives between the people running the business, and its true owners. Shareholders will be pleased by the fact that insiders own Kim Loong Resources Berhad shares worth a considerable sum. As a matter of fact, their holding is valued at RM182m. That shows significant buy-in, and may indicate conviction in the business strategy. That amounts to 7.5% of the company, demonstrating a degree of high-level alignment with shareholders.