Yahoo Finance Is Now The Time To Put MS INTERNATIONAL (LON:MSI) On Your Watchlist?
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. But the reality is that when a company loses money each year, for long enough, its investors will usually take their share of those losses. Loss-making companies are always racing against time to reach financial sustainability, so investors in these companies may be taking on more risk than they should.
Despite being in the age of tech-stock blue-sky investing, many investors still adopt a more traditional strategy; buying shares in profitable companies like MS INTERNATIONAL (LON:MSI). While this doesn't necessarily speak to whether it's undervalued, the profitability of the business is enough to warrant some appreciation - especially if its growing.
See our latest analysis for MS INTERNATIONAL
MS INTERNATIONAL's Improving Profits
Over the last three years, MS INTERNATIONAL has grown earnings per share (EPS) at as impressive rate from a relatively low point, resulting in a three year percentage growth rate that isn't particularly indicative of expected future performance. So it would be better to isolate the growth rate over the last year for our analysis. In impressive fashion, MS INTERNATIONAL's EPS grew from UK£0.17 to UK£0.44, over the previous 12 months. Year on year growth of 154% is certainly a sight to behold.
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. MS INTERNATIONAL shareholders can take confidence from the fact that EBIT margins are up from 5.1% to 9.1%, and revenue is growing. Both of which are great metrics to check off for potential growth.
The chart below shows how the company's bottom and top lines have progressed over time. Click on the chart to see the exact numbers.
MS INTERNATIONAL isn't a huge company, given its market capitalisation of UK£78m. That makes it extra important to check on its balance sheet strength.
Are MS INTERNATIONAL Insiders Aligned With All Shareholders?
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. That's because insider buying often indicates that those closest to the company have confidence that the share price will perform well. Of course, we can never be sure what insiders are thinking, we can only judge their actions.
Despite some MS INTERNATIONAL insiders disposing of some shares, we note that there was UK£54k more in buying interest among those who know the company best Although some people may hesitate due to the share sales, the fact that insiders bought more than they sold, is a positive thing to note. We also note that it was the Group Finance Director & Executive Director, Michael O'Connell, who made the biggest single acquisition, paying UK£165k for shares at about UK£5.90 each.
These recent buys aren't the only encouraging sign for shareholders, as a look at the shareholder registry for MS INTERNATIONAL will reveal that insiders own a significant piece of the pie. Indeed, with a collective holding of 54%, company insiders are in control and have plenty of capital behind the venture. Intuition will tell you this is a good sign because it suggests they will be incentivised to build value for shareholders over the long term. In terms of absolute value, insiders have UK£42m invested in the business, at the current share price. So there's plenty there to keep them focused!
Does MS INTERNATIONAL Deserve A Spot On Your Watchlist?
MS INTERNATIONAL's earnings per share growth have been climbing higher at an appreciable rate. To make matters even better, the company insiders who know the company best have put their faith in the its future and have been buying more stock. This quick rundown suggests that the business may be of good quality, and also at an inflection point, so maybe MS INTERNATIONAL deserves timely attention. Still, you should learn about the 1 warning sign we've spotted with MS INTERNATIONAL.
The good news is that MS INTERNATIONAL is not the only growth stock with insider buying. Here's a list of them... 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.
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