Here’s Why We Think Tambun Indah Land Berhad (KLSE:TAMBUN) Might Deserve Your Attention Today

Investors are often guided by the idea of ​​discovering ‘the next big thing’, even if that means buying ‘story stocks’ without any revenue, let alone profit. Sometimes these stories can cloud the minds of investors, leading them to invest with their emotions rather than on the merits 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.

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 Tambun Indah Land Berhad (KLSE:TAMBUN). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Tambun Indah Land Berhad with the means to add long-term value to shareholders.

Check out our latest analysis for Tambun Indah Land Berhad

How Quickly Is Tambun Indah Land Berhad Increasing Earnings Per Share?

If a company can keep growing earnings per share (EPS) long enough, its share price should eventually follow. So it makes sense that experienced investors pay close attention to company EPS when undertaking investment research. It is certainly nice to see that Tambun Indah Land Berhad has managed to grow EPS by 19% per year over three years. If growth like this continues on into the future, then shareholders will have plenty to smile about.

Top-line growth is a great indicator that growth is sustainable, and combined with a high earnings before interest and taxation (EBIT) margin, it’s a great way for a company to maintain a competitive advantage in the market. The music to the ears of Tambun Indah Land Berhad shareholders is that EBIT margins have grown from 30% to 36% in the last 12 months and revenues are on an upward trend as well. That’s great to see, on both counts.

In the chart below, you can see how the company has grown earnings and revenue over time. Click on the chart to see the exact numbers.

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Fortunately, we’ve got access to analyst forecasts of Tambun Indah Land Berhad’s futures profits. You can do your own forecasts without looking, or you can take a peek at what the professionals are predicting.

Are Tambun Indah Land Berhad Insiders Aligned With All Shareholders?

It’s pleasing to see company leaders by putting their money on the line, so to speak, because it increases the alignment of incentives between the people running the business, and its true owners. Shareholders will be pleased by the fact that insiders own Tambun Indah Land Berhad shares worth a considerable sum. As a matter of fact, their holding is valued at RM91m. That’s a lot of money, and no small incentive to work hard. That amounts to 27% of the company, demonstrating a degree of high-level alignment with shareholders.

It’s good to see that insiders are invested in the company, but are the remuneration levels reasonable? A brief analysis of the CEO compensation suggests they are. Our analysis has discovered that the median total compensation for the CEOs of companies like Tambun Indah Land Berhad with market caps under RM880m is about RM496k.

The CEO of Tambun Indah Land Berhad was paid just RM40k in total compensation for the year ending December 2021. You could consider this pay as somewhat symbolic, which suggests the CEO does not need a lot of compensation to stay motivated. CEO remuneration levels are not the most important metric for investors, but when the pay is modest, it does support enhanced alignment between the CEO and the ordinary shareholders. It can also be a sign of a culture of integrity, in a broader sense.

Should You Add Tambun Indah Land Berhad To Your Watchlist?

If you believe that share price follows earnings per share you should definitely be delving further into Tambun Indah Land Berhad’s strong EPS growth. If you still have your doubts, remember too that company insiders have a considerable investment aligning themselves with the shareholders and CEO pay is quite modest compared to similarly sized companies. Everyone has their own preferences when it comes to investing but it definitely makes Tambun Indah Land Berhad look rather interesting indeed. Even so, be aware that Tambun Indah Land Berhad is showing 3 warning signs in our investment analysis and 1 of those shouldn’t be ignored…

There’s always the possibility of doing well buying stocks that are not growing earnings and do not have insiders buying shares. But for those who consider these metrics important, we encourage you to check out companies that do have those features. You can access a free list of them here.

Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.

Have feedback on this article? Concerned about the content? get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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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