Is It Time to Add Oriental Food Industries Holdings Berhad (KLSE:OFI) to Your Investment Watchlist?

Investing in companies that tell a great story but lack profits can be tempting, especially for beginners. However, these high-risk investments often lead to disappointment. Many investors find themselves losing money on businesses that burn through cash without showing real returns. It’s essential to be cautious not to throw good money after bad.

If you’re looking for a company with actual revenue and profits, you might want to consider Oriental Food Industries Holdings Berhad (KLSE:OFI). While it’s not guaranteed to be the best investment, its profitability certainly stands out.

One key aspect investors look for is earnings per share (EPS) growth. A company that consistently grows its EPS can see its share price rise over time. Oriental Food Industries has posted impressive EPS growth of 37% annually over the past three years. If they can keep this momentum, their shareholders are likely to be pleased.

Beyond EPS growth, revenue growth is also important. A healthy earnings before interest and taxation (EBIT) margin helps a company stay competitive. Recently, Oriental Food Industries increased its EBIT margin from 7.9% to 11%, and their revenue continues to trend upwards. This is a very encouraging sign.

While Oriental Food Industries has a market capitalization of RM391 million, it’s wise to be mindful of their cash and debt situation before diving in. Keeping an eye on these factors will provide a clearer picture of the company’s financial health.

It’s also a positive indicator when company insiders hold a significant portion of shares. In this case, insiders own 54% of Oriental Food Industries, showing they have a vested interest in the company’s success. Their collective investment of RM211 million drives home the idea that they are focused on building value for shareholders over the long term.

Regarding executive pay, Oriental Food Industries’ CEO received a modest RM55,000 last year, far below the median for similar companies. This low compensation suggests that the CEO is likely motivated by the company’s success rather than personal wealth, which can reflect good governance.

In summary, Oriental Food Industries Holdings has shown strong EPS growth, a commitment to shareholder value, and sensible executive pay practices. While it presents a compelling case, it’s important to stay aware of potential risks. You may want to check out any red flags or warnings before making any investment decisions.

Overall, if you appreciate companies with solid growth and strong insider ownership, Oriental Food Industries could be worth a closer look.

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