It's common for many investors, especially those who are inexperienced, to buy shares in companies with a good story even if these companies are loss-making.  Sometimes these stories can cloud the minds of investors, leading them to invest with their emotions rather than on the merit of good company fundamentals.  While a well funded company may sustain losses for years, it will need to generate a profit eventually, or else investors will move on and the company will wither away.

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 Yangzijiang Shipbuilding (Holdings) (SGX:BS6). While profit isn't the sole metric that should be considered when investing, it's worth recognising businesses that can consistently produce it.

How Fast Is Yangzijiang Shipbuilding (Holdings) Growing?

The market is a voting machine in the short term, but a weighing machine in the long term, so you'd expect share price to follow earnings per share (EPS) outcomes eventually.  So it makes sense that experienced investors pay close attention to company EPS when undertaking investment research.   It certainly is nice to see that Yangzijiang Shipbuilding (Holdings) has managed to grow EPS by 17% per year over three years.   As a general rule, we'd say that if a company can keep up that sort of growth, shareholders will be beaming.  

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.    The good news is that Yangzijiang Shipbuilding (Holdings) is growing revenues, and EBIT margins improved by 7.0 percentage points to 20%, over the last year.  Both of which are great metrics to check off for potential growth.  

You can take a look at the company's revenue and earnings growth trend, in the chart below.  Click on the chart to see the exact numbers.

SGX:BS6 Earnings and Revenue History April 5th 2024

You don't drive with your eyes on the rear-view mirror, so you might be more interested in this free report showing analyst forecasts for Yangzijiang Shipbuilding (Holdings)'s future profits.

Are Yangzijiang Shipbuilding (Holdings) Insiders Aligned With All Shareholders?

We would not expect to see insiders owning a large percentage of a S$7.5b company like Yangzijiang Shipbuilding (Holdings).  But we do take comfort from the fact that they are investors in the company.     Notably, they have an enviable stake in the company, worth CN¥335m.   Holders should find this level of insider commitment quite encouraging, since it would ensure that the leaders of the company would also experience their success, or failure, with the stock.  

Should You Add Yangzijiang Shipbuilding (Holdings) To Your Watchlist?

If you believe that share price follows earnings per share you should definitely be delving further into Yangzijiang Shipbuilding (Holdings)'s strong EPS growth.   Further, the high level of insider ownership is impressive and suggests that the management appreciates the EPS growth and has faith in Yangzijiang Shipbuilding (Holdings)'s continuing strength.  On the balance of its merits, solid EPS growth and company insiders who are aligned with the shareholders would indicate a business that is worthy of further research.     You still need to take note of risks, for example - Yangzijiang Shipbuilding (Holdings) has   1 warning sign  we think you should be aware of.  

Although Yangzijiang Shipbuilding (Holdings) certainly looks good, it may appeal to more investors if insiders were buying up shares. If you like to see companies with insider buying, then check out this handpicked selection of Singaporean companies that not only boast of strong growth but have also seen recent insider buying..

Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using 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 account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.