We Ran A Stock Scan For Earnings Growth And Sing Investments & Finance (SGX:S35) Passed With Ease

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 Sing Investments & Finance (SGX:S35). Now this is not to say that the company presents the best investment opportunity around, but profitability is a key component to success in business.

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Generally, companies experiencing growth in earnings per share (EPS) should see similar trends in share price. So it makes sense that experienced investors pay close attention to company EPS when undertaking investment research. Sing Investments & Finance managed to grow EPS by 8.6% per year, over three years. That’s a pretty good rate, if the company can sustain it.

Top-line growth is a great indicator that growth is sustainable, and combined with a high earnings before interest and taxation (EBIT) margin, it’s a great way for a company to maintain a competitive advantage in the market. Our analysis has highlighted that Sing Investments & Finance’s revenue from operations did not account for all of their revenue in the previous 12 months, so our analysis of its margins might not accurately reflect the underlying business. While we note Sing Investments & Finance achieved similar EBIT margins to last year, revenue grew by a solid 16% to S$79m. That’s encouraging news for the company!

In the chart below, you can see how the company has grown earnings and revenue, over time. For finer detail, click on the image.

View our latest analysis for Sing Investments & Finance

Sing Investments & Finance isn’t a huge company, given its market capitalisation of S$378m. That makes it extra important to check on its balance sheet strength.

Insider interest in a company always sparks a bit of intrigue and many investors are on the lookout for companies where insiders are putting their money where their mouth is. This view is based on the possibility that stock purchases signal bullishness on behalf of the buyer. However, insiders are sometimes wrong, and we don’t know the exact thinking behind their acquisitions.

Over the last 12 months Sing Investments & Finance insiders spent S$119k more buying shares than they received from selling them. Shareholders who may have questioned insiders selling will find some reassurance in this fact. We also note that it was the MD, CEO & Executive Director, Sze Leong Lee, who made the biggest single acquisition, paying S$112k for shares at about S$1.11 each.

The good news, alongside the insider buying, for Sing Investments & Finance bulls is that insiders (collectively) have a meaningful investment in the stock. To be specific, they have S$37m worth of shares. That’s a lot of money, and no small incentive to work hard. Those holdings account for over 9.8% of the company; visible skin in the game.

As previously touched on, Sing Investments & Finance is a growing business, which is encouraging. In addition, insiders have been busy adding to their sizeable holdings in the company. That should do plenty in prompting budding investors to undertake a bit more research – or even adding the company to their watchlists. It’s still necessary to consider the ever-present spectre of investment risk. We’ve identified 1 warning sign with Sing Investments & Finance , and understanding this should be part of your investment process.

The good news is that Sing Investments & Finance is not the only stock with insider buying. Here’s a list of small cap, undervalued companies in SG with insider buying in the last three months!

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

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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.