With EPS Growth And More, Progressive Path Group Holdings (HKG:1581) Makes An Interesting Case
Progressive Path Group Holdings (HKG:1581) is attracting investor interest due to its revenue and profit growth, with EPS increasing by 12% annually over three years. The company reported a 25% revenue growth to HK$914m, indicating strong performance. Insiders own 59% of shares, aligning their interests with shareholders. Despite its small market cap of HK$88m, the company's growth and insider ownership make it a potential candidate for investors' watchlists, although there are some warning signs to consider.
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. Sometimes these stories can cloud the minds of investors, leading them to invest with their emotions rather than on the merit of good company fundamentals. While a well funded company may sustain losses for years, it will need to generate a profit eventually, or else investors will move on and the company will wither away.
In contrast to all that, many investors prefer to focus on companies like Progressive Path Group Holdings (HKG:1581), which has not only revenues, but also profits. Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Progressive Path Group Holdings with the means to add long-term value to shareholders.
AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early.
How Quickly Is Progressive Path Group Holdings Increasing Earnings Per Share?
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. Progressive Path Group Holdings managed to grow EPS by 12% per year, over three years. That's a good rate of growth, if it can be sustained.
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. While we note Progressive Path Group Holdings achieved similar EBIT margins to last year, revenue grew by a solid 25% to HK$914m. That's a real positive.
The chart below shows how the company's bottom and top lines have progressed over time. For finer detail, click on the image.
See our latest analysis for Progressive Path Group Holdings
Progressive Path Group Holdings isn't a huge company, given its market capitalisation of HK$88m. That makes it extra important to check on its balance sheet strength.
Are Progressive Path Group Holdings 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 Progressive Path Group Holdings insiders own a significant number of shares certainly is appealing. Indeed, with a collective holding of 59%, company insiders are in control and have plenty of capital behind the venture. This should be seen as a good thing, as it means insiders have a personal interest in delivering the best outcomes for shareholders. Of course, Progressive Path Group Holdings is a very small company, with a market cap of only HK$88m. That means insiders only have HK$52m worth of shares, despite the large proportional holding. That's not a huge stake in absolute terms, but it should help keep insiders aligned with other shareholders.
Should You Add Progressive Path Group Holdings To Your Watchlist?
As previously touched on, Progressive Path Group Holdings is a growing business, which is encouraging. To add an extra spark to the fire, significant insider ownership in the company is another highlight. These two factors are a huge highlight for the company which should be a strong contender your watchlists. You should always think about risks though. Case in point, we've spotted 2 warning signs for Progressive Path Group Holdings you should be aware of, and 1 of them makes us a bit uncomfortable.
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 HK with promising growth potential and insider confidence.
Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.
