Investors often seek out the next big thing, sometimes investing in companies without revenue or profit, known as ‘story stocks’. However, as Peter Lynch once said in his book “One Up On Wall Street,” long shots rarely pay off. Loss-making companies are always in a race against time to become financially sustainable, posing higher risks for investors.
In today’s tech-stock era, many investors still prefer a more traditional approach by investing in profitable companies like Vision (TSE:9416). While profit is not the only factor to consider when investing, it is important to acknowledge businesses that consistently generate profits.
Over the past three years, Vision has shown impressive growth in earnings per share (EPS), with a 40% increase from JP¥45.97 to JP¥64.19. The company has also maintained stable earnings before interest and tax (EBIT) margins while growing revenue by 14% to JP¥32b.
Insiders at Vision have significant investments in the company, aligning their interests with shareholders. With over JP¥3.7b worth of shares, insiders hold more than 6.1% of the company, showing their confidence in Vision’s future prospects.
For growth investors, Vision’s strong earnings growth and high insider ownership make it a stock worth watching. However, it’s important to note that there are 2 warning signs for Vision that investors should consider.
While investing in stocks without growing earnings and absent insider buying can yield results, investors valuing these metrics may find companies in Japan with promising growth potential and insider confidence worth considering.
Please note that the insider transactions mentioned in this article are based on reportable transactions in the relevant jurisdiction.