If EPS growth is important to you, Yangtze Optical Fiber And Cable Limited (HKG: 6869) presents an opportunity.
It is common for many investors, especially those who are inexperienced, to buy shares in companies that have a good history, even if those companies are loss-making. But the reality is that when a company loses money every year, for long enough, its investors will usually take their share of those losses. Loss-making companies are always in a race against time to achieve financial viability, so investors in these companies may take on more risk than they should.
Contrary to all this, many investors prefer to focus on companies like Fiber Optic and Yangtze Cable Limited (HKG:6869), which not only generates revenue, but also profits. While profit isn’t the only metric to consider when investing, it’s worth recognizing companies that can consistently produce it.
Check out our latest review for Yangtze Optical Fiber And Cable Limited
How fast is the Yangtze optical fiber and cable developing?
Typically, companies experiencing earnings per share (EPS) growth should see similar stock price trends. It therefore makes sense for experienced investors to pay close attention to company EPS when undertaking investment research. Over the past three years, Yangtze Optical Fiber And Cable Limited has grown EPS by 4.1% annually. This may not be particularly high growth, but it shows that earnings per share are steadily moving in the right direction.
One way to check a company’s growth is to look at the evolution of its revenues and its earnings before interest and taxes (EBIT) margins. The music to the ears of Yangtze Optical Fiber And Cable Limited shareholders is that EBIT margins have increased from 2.5% to 7.3% in the past 12 months and revenues are also on an upward trend. These are two great indicators to check for potential growth.
The chart below shows how the company’s top and bottom line has grown over time. For more details, click on the image.
Fortunately, we have access to analyst forecasts from Yangtze Optical Fiber And Cable Limited. coming profits. You can make your own predictions without looking, or you can take a peek at what the pros are predicting.
Are Yangtze Optical Fiber And Cable Limited insiders aligned with all shareholders?
As a general rule, it is worth considering how much the CEO is paid, as unreasonably high rates could be considered against the interests of shareholders. The median total compensation for CEOs of companies similar in size to Yangtze Optical Fiber And Cable Limited, with market capitalizations between 14 billion and 45 billion yen, is about 5.0 million yen.
The CEO of Yangtze Optical Fiber And Cable Limited earned total compensation worth 3.0 million Canadian yen in the year to December 2021. This is below average for companies of a similar size and seems quite reasonable. CEO pay levels aren’t the most important metric for investors, but when the salary is modest, it promotes better alignment between the CEO and ordinary shareholders. Generally, it can be argued that reasonable compensation levels attest to good decision-making.
Is the Yangtze’s Limited Fiber and Cable Worth Watching?
A bright spot for Yangtze Optical Fiber And Cable Limited is that it is growing EPS. It’s nice to see. Not only that, but the CEO is paid quite reasonably, which should make investors trust the board more. So, based on its merits, the title merits further research, if not addition to your watchlist. What about the risks? Every business has them, and we’ve spotted 1 warning sign for Yangtze Optical Fiber And Cable Limited you should know.
Although Yangtze Optical Fiber And Cable Limited certainly looks good, it could attract more investors if insiders buy shares. If you like seeing insiders buy, then this free list of growing companies that insiders are buying might be exactly what you’re looking for.
Please note that insider trading discussed in this article refers to reportable trading in the relevant jurisdiction.
Valuation is complex, but we help make it simple.
Find out if Fiber Optic and Yangtze Cable Limited is potentially overvalued or undervalued by viewing our full analysis, which includes fair value estimates, risks and warnings, dividends, insider trading and financial health.
See the free analysis
Feedback on this article? Concerned about content? Get in touch with us directly. You can also email the editorial team (at) Simplywallst.com.
This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.