Investing in a company with the potential to turn its fortunes around can be a thrilling prospect for many speculators. Even companies with no revenue, no profit, and a history of falling short can attract investors seeking high-risk, high-reward opportunities. However, as legendary investor Peter Lynch cautioned in “One Up On Wall Street,” long shots rarely pay off in the end.
For those who prefer a more stable investment option, profitable and growing companies like Powermatic Data Systems (SGX:BCY) may be more appealing. While the market may currently value the company fairly, consistent profits can provide long-term value to shareholders.
In the last three years, Powermatic Data Systems has seen a 12% annual growth in earnings per share (EPS). This steady growth is a positive sign for long-term investors, as it indicates the potential for future share price appreciation.
Analyzing revenue growth and EBIT margins further supports the sustainability of Powermatic Data Systems’ profit growth. Despite flat revenue, the company has improved its EBIT margins from 31% to 43% in the last year, indicating efficient operations and profitability.
Moreover, with insiders holding a significant 73% stake in the company, their interests are aligned with shareholders, signaling confidence in the company’s future prospects. This high level of insider ownership, coupled with the company’s growth trajectory, makes Powermatic Data Systems a compelling addition to investors’ watchlists.
While investing always carries risks, Powermatic Data Systems’ combination of growth potential and insider alignment make it a stock worth considering for those seeking long-term value in their portfolios.