Like a puppy chasing its tail, some new investors often chase “the next big thing,” even if that means buying “history stocks” with no income, let alone profit. And in their study entitled Who is the prey of the Wolf of Wall Street? ‘ Leuz and. Al found that it is “quite common” for investors to lose money by buying into “pump and dump” programs.
If, on the other hand, you like businesses that have revenue, and even profits, then you might be interested in QL Berhad Resources (KLSE: QL). Even if stocks are fully valued today, most capitalists would recognize its benefits as a demonstration of constant value generation. In comparison, loss-making companies act like a sponge for capital – but unlike such a sponge, they don’t always produce something when in a hurry.
Check out our latest review for QL Resources Berhad
QL Resources Berhad earnings per share are growing.
If a company can sustain earnings per share (EPS) growth long enough, its stock price will eventually follow. So it’s no surprise that I like to invest in companies with growing EPS. Over the past three years, QL Resources Berhad has increased its EPS by 11% per year. This growth rate is good enough, assuming the business can sustain it.
A close look at growth in income and profit margins before interest and taxes (EBIT) can help inform a vision on the sustainability of recent earnings growth. While QL Resources Berhad has been successful in increasing revenues over the past year, EBIT margins have been reduced at the same time. So it looks like the future will allow me to continue growing, especially if EBIT margins can stabilize.
In the graph below, you can see how the business has increased its profit and revenue over time. Click on the graph to see the exact numbers.
In investing, as in life, the future matters more than the past. So why not watch this free interactive visualization of QL Resources Berhad’s provide benefits?
Are QL Resources Berhad Insiders Aligned with All Shareholders?
I like that business leaders have some skin in the game, so to speak, because it increases the alignment of incentives between the people who run the business and its real owners. So it’s good to see that QL Resources Berhad insiders have significant capital invested in the stock. Indeed, they have invested a sparkling mountain of wealth, currently valued at RM445. I would find that kind of skin in the game quite encouraging, if I owned any stock, as it would ensure that the executives of the company would also experience my success, or failure, with the action.
It’s good to see insiders invested in the company, but are the pay levels reasonable? A brief analysis of CEO compensation suggests they are. For companies with market capitalization between RM 8.4 billion and RM 27 billion, like QL Resources Berhad, the median CEO salary is around RM 4.3 million.
QL Resources CEO Berhad received RM 2.7 million in compensation for the fiscal year ended. This is lower than the average for similar sized companies and seems pretty reasonable to me. CEO compensation levels aren’t the most important metric for investors, but when the salary is modest, it promotes better alignment between the CEO and common shareholders. It can also be a sign of a culture of integrity, in the broad sense.
Should you add QL Resources Berhad to your watchlist?
As I mentioned before, QL Resources Berhad is a growing company, that’s what I like to see. Profit growth may be QL Resources Berhad’s main game, but the fun not stop there. With a significant level of insider ownership and reasonable CEO compensation, a reasonable mind might conclude that this is a stock to watch. However, be aware that QL Resources Berhad shows 1 warning sign in our investment analysis , you must know…
While QL Resources Berhad certainly looks good to me, I would like more insiders to buy stocks. If you also like to see insiders buy, then this free list of growing companies that insiders are buying, might be exactly what you are looking for.
Please note that the insider trading discussed in this article refers to reportable trades 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 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 goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in any of the stocks mentioned.