$PropNex (OYY.SG)$ volume in very little….. looks like a lot...

丰衣足食 : Is PropNEX (SGX: OYY)'s earnings worth your attention?
June 10, 2023
Investors are often guided by the idea of discovering “the next big thing,” even if it means buying “story stocks” with no income, let alone profit. Unfortunately, these high-risk investments are often unlikely to pay off, and many investors have paid the price to learn the lessons. A loss-making company is like a sponge of capital, so investors should be careful not to invest large sums of money in bad circumstances.

If this type of company isn't your style; you like companies that generate revenue or even make a profit, then you might be interested in PropNEX (SGX: OYY). Even if the company received a fair valuation from the market, investors would agree that generating continued profits would continue to provide PropNEX with the means to add long-term value to shareholders.

Check out our latest PropNEX analysis

PropNEX's earnings per share are growing

If you think the efficiency of the market is even vague, then in the long run, you'd expect the company's stock price to change according to its earnings per share (EPS) results. As a result, there are many investors who like to buy shares of companies with growing earnings per share. To the joy of shareholders, PropNEX has achieved 46% compound annual earnings per share growth over the past three years, which is impressive. Although this rate of growth cannot be sustained over a long period of time, it has certainly attracted the attention of potential investors.

Revenue growth is an important indicator of sustainable growth, plus higher profit before interest and taxes (EBIT), which is a great way for companies to maintain their competitive advantage in the market. PropNEX maintained a stable profit margin before interest and taxes last year, while revenue increased 7.5% to SGD 1.0b. That's a real positive factor.

In the following image, you can see how the company has achieved profit and revenue growth over time. To see the actual numbers, click on the chart.

Revenue and revenue history
Revenue and revenue history
In investing, just like in life, the future is more important than the past. So why not check out this free interactive visualization of PropNEX predicts profit?

Are PropNEX insiders in line with all shareholders?

An insider's interest in a company always sparks some interest, and many investors are looking for companies that insiders say they must do. Because usually, buying a stock indicates that buyers think its value is undervalued. Of course, we can never be sure what the insiders think; we can only judge their actions.

The first good news is that PropNEX insiders haven't reported stock sales over the past 12 months. But importantly, Executive Director Keng Seong Fong spent SGD 675,000 to buy shares at an average price of SGD 0.91. Acquisitions like these can give us an idea of the company's management's beliefs — and they all seem positive.

In addition to insider purchases, another encouraging sign of PropNEX is that insiders hold quite a bit of equity as a group. We noticed that their shares in the company were worth as much as S$180 million. This share accounts for 24% of the company's business, gives insiders great influence, and has good reason to create value for shareholders. So here's an opportunity to invest in a company where management has real incentives.

PropNEX's earnings per share have been soaring, with extremely high growth rates. To make this deal even sweeter, insiders have a huge profit in this game, and can even buy more. This quick summary suggests that the business is probably of good quality and is still at an inflection point, so maybe PropNEX deserves timely attention. Before you get too excited, however, we've found that you should pay attention.

Keen growth investors love to see internal purchases.

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