We Ran A Stock Scan For Earnings Growth And DAEYANG ELECTRIC.Co.Ltd (KOSDAQ:108380) Passed With Ease

The excitement of investing in a company that can reverse its fortunes is a big draw for some speculators, so even companies that have no revenue, no profit, and a record of falling short, can manage to find investors. Unfortunately, these high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson. 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.

In contrast to all that, many investors prefer to focus on companies like DAEYANG ELECTRIC.Co.Ltd (KOSDAQ:108380), which has not only revenues, but also profits. 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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DAEYANG ELECTRIC.Co.Ltd's Earnings Per Share Are Growing

Generally, companies experiencing growth in earnings per share (EPS) should see similar trends in share price. Therefore, there are plenty of investors who like to buy shares in companies that are growing EPS. Impressively, DAEYANG ELECTRIC.Co.Ltd has grown EPS by 31% per year, compound, in the last three years. If growth like this continues on into the future, then shareholders will have plenty to smile about.

One way to double-check a company's growth is to look at how its revenue, and earnings before interest and tax (EBIT) margins are changing. The music to the ears of DAEYANG ELECTRIC.Co.Ltd shareholders is that EBIT margins have grown from 1.8% to 8.0% in the last 12 months and revenues are on an upwards trend as well. That's great to see, on both counts.

You can take a look at the company's revenue and earnings growth trend, in the chart below. For finer detail, click on the image.

Check out our latest analysis for DAEYANG ELECTRIC.Co.Ltd

DAEYANG ELECTRIC.Co.Ltd isn't a huge company, given its market capitalisation of ₩161b. That makes it extra important to check on its balance sheet strength.

Are DAEYANG ELECTRIC.Co.Ltd Insiders Aligned With All Shareholders?

Many consider high insider ownership to be a strong sign of alignment between the leaders of a company and the ordinary shareholders. So as you can imagine, the fact that DAEYANG ELECTRIC.Co.Ltd insiders own a significant number of shares certainly is appealing. To be exact, company insiders hold 62% of the company, so their decisions have a significant impact on their investments. This makes it apparent they will be incentivised to plan for the long term - a positive for shareholders with a sit and hold strategy. With that sort of holding, insiders have about ₩99b riding on the stock, at current prices. That should be more than enough to keep them focussed on creating shareholder value!

Is DAEYANG ELECTRIC.Co.Ltd Worth Keeping An Eye On?

You can't deny that DAEYANG ELECTRIC.Co.Ltd has grown its earnings per share at a very impressive rate. That's attractive. Further, the high level of insider ownership is impressive and suggests that the management appreciates the EPS growth and has faith in DAEYANG ELECTRIC.Co.Ltd's continuing strength. Fast growth and confident insiders should be enough to warrant further research, so it would seem that it's a good stock to follow. Still, you should learn about the 1 warning sign we've spotted with DAEYANG ELECTRIC.Co.Ltd.

While opting for stocks without growing earnings and absent insider buying can yield results, for investors valuing these key metrics, here is a carefully selected list of companies in KR with promising growth potential and insider confidence.

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.