For newbies, it might seem like a good idea (and an exciting prospect) to buy a business that tells investors a good story, even if it lacks a history of revenue and profit altogether. But the reality is that when a business loses money every year, for long enough, its investors will usually take their share of those losses.
Contrary to all this, I prefer to spend time on companies like Infinity Logistics and Transport Ventures (HKG: 1442), which not only has income, but also profits. Even if stocks are fully valued today, most capitalists would recognize its benefits as a demonstration of constant value generation. Conversely, a loss-making company has yet to prove itself with profit, and eventually the sweet milk of external capital can turn sour.
Check out our latest review for Infinity Logistics and Transport Ventures
How fast is Infinity Logistics and Transport Ventures increasing earnings per share?
Even modest growth in earnings per share (EPS) can create significant value, when it is reliably sustained year over year. So, the growth of EPS can certainly make an investor take note of a security. Year over year, Infinity Logistics and Transport Ventures increased its EPS from RM 0.014 to RM 0.015. This is a modest gain of 5.5%.
One way to check how a business is growing is to look at how its income and profit before interest and tax (EBIT) have changed. While we note that Infinity Logistics and Transport Ventures EBIT margins were stable over the past year, revenue increased 16% to RM 248 million. It is progress.
The graph below shows how the company’s bottom line has progressed over time. Click on the graph to see the exact numbers.
While it is always good to see increased profits, you should always remember that a low balance sheet could come back to bite. So check out the strength of Infinity Logistics and Transport Ventures’ balance sheets, before you get too excited.
Are Insiders of Infinity Logistics and Transport Ventures Aligned with All Shareholders?
Like that fresh smell in the air when the rains come, insider buying fills me with optimistic anticipation. This view is based on the possibility that stock purchases signal an uptrend on behalf of the buyer. Of course, we can never be sure what insiders think, we can only judge their actions.
Although we saw insider sales (worth RM2.9 million), this was overshadowed by a mountain of buys, totaling RM34 million in just one year. I find this encouraging as it suggests that they are optimistic about the future of Infinity Logistics and Transport Ventures. It should also be noted that it was the non-executive chairman Jyh Tan who made the largest purchase, worth HK $ 31 million, paying HK $ 0.38 per share.
The good news, along with insider buying, for the bulls of Infinity Logistics and Transport Ventures is that insiders (collectively) have a significant investment in the stock. Indeed, they hold 265 million RM from its stock. That’s a lot of money, and that’s no small incentive to work hard. These holdings represent more than 10% of the company; skin visible in the game.
While insiders already own a significant number of shares and buy more of them, the good news for common shareholders does not end there. This is because, according to our analysis, CEO Kong Yew Chan is paid less than the median of companies of similar size. I found out that the median total compensation of CEOs of companies like Infinity Logistics and Transport Ventures with market caps between RM839million and RM3.4 billion is around RM1.4million.
The CEO of Infinity Logistics and Transport Ventures received only RM509k in full compensation for the year ending. It sounds like modest compensation to me, and may suggest a certain respect for the interests of shareholders. Although the level of CEO compensation is not a big factor in my view of the company, modest compensation is positive, as it suggests that the board has the interests of shareholders in mind. It can also be a sign of good governance, more generally.
Are Infinity’s logistics and transportation companies worth watching?
As I mentioned before, Infinity Logistics and Transport Ventures is a growing company, that’s what I like to see. On top of that, we’ve seen insiders buy stocks even if they already have a lot. This makes the company a prime candidate for my watchlist – and arguably a research priority. However, you should always think about the risks. Concrete example, we have spotted 2 warning signs for Infinity Logistics and Transport Ventures you must be aware.
As a growth investor, I like to see insider buying. But Infinity Logistics and Transport Ventures is not the only one. You can see a free list here.
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 shares 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 the mentioned stocks.
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