Here’s why SILICON2 (KOSDAQ:257720) has caught investors’ attention

Investors are often driven by the idea of ​​finding “the next big thing,” even if it means buying “star stocks” with no income, let alone profit. But as Peter Lynch said in Ahead of Wall Street“Long shots almost never pay off.” Loss-making companies are always racing against time to achieve financial viability, and investors in these companies may be taking on more risk than they should.

Although we are in the era of high-risk investing in technology stocks, many investors still adopt a more traditional strategy: buying shares in profitable companies like SILICON 2 (KOSDAQ: 257,720). While profit is not the only metric to consider when investing, it is worth recognizing companies that can consistently produce it.

Check out our latest analysis for SILICON2

SILICON2 Profits Improved

Investors and investment funds chase profits, which means that stock prices tend to rise when earnings per share (EPS) are positive. This is why EPS growth is viewed so favorably. SILICON2 should be commended for growing its EPS from ₩257 to ₩940 in a single year. When earnings are growing this fast, it often means that the company has good prospects for the future. This could indicate that the company is reaching an inflection point.

It is often useful to look at EBIT (earnings before interest and tax) margins as well as revenue growth to get another feel for the quality of the company’s growth. SILICON2 shareholders can take comfort in the fact that EBIT margins have increased from 10% to 16%, and revenue is growing. Both of these are great indicators to check for potential growth.

The chart below shows how the company’s financial results and revenue have changed over time. To see the actual numbers, click on the chart.

You don’t drive with your eyes in the rearview mirror, so this might interest you more. free report showing analysts’ forecasts for SILICON2 future benefits.

Are SILICON2 insiders aligned with all shareholders?

Many consider a high number of insider shareholders to be a strong sign of alignment between a company’s management and common shareholders. Those interested in SILICON2 will therefore be pleased to learn that insiders have shown their conviction by owning a large portion of the company’s shares. In fact, with 48% of the company under their belt, insiders are deeply invested in the company. Those who are reassured by such insider ownership should be happy, as it implies that the company’s management is genuinely motivated to create shareholder value at the current share price. Such a level of investment from insiders is not to be overlooked.

Is SILICON2 Worth a Spot on Your Watchlist?

SILICON2’s earnings have taken off quite impressively. This level of EPS growth does wonders for attracting investment, and the significant internal investment in the company is just the cherry on top. Sometimes, rapid EPS growth is a sign that the company has reached an inflection point, so there is a potential opportunity to be had here. So, on the face of it, SILICON2 is worth putting on your watchlist; after all, shareholders do well when the market underestimates fast-growing companies. It is worth noting, however, that we have seen 2 Warning Signs for SILICON2 that you need to consider.

While opting for stocks without earnings growth and insider buying can yield results, for investors who value these key metrics, here is a hand-picked list of KR companies with promising growth potential and insider confidence.

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

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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to constitute financial advice. This is not a recommendation to buy or sell any stock, and does not take into account your objectives or financial situation. Our goal is to provide you with focused, long-term analysis based on fundamental data. Please note that our analysis may not factor in the latest price-sensitive company announcements or qualitative information. Simply Wall St has no position in any of the stocks mentioned.

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