Should You Be Adding Muar Ban Lee Group Berhad (KLSE:MBL) To Your Watchlist Today?

For beginners, it can seem like a good idea (and an exciting prospect) to buy a company that tells a good story to investors, even if it currently lacks a track record of revenue and profit. But the reality is that when a company loses money each year, for long enough, its investors will usually take their share of those losses. A loss-making company is yet to prove itself with profit, and eventually the inflow of external capital may dry up.

If this kind of company isn't your style, you like companies that generate revenue, and even earn profits, then you may well be interested in Muar Ban Lee Group Berhad (KLSE:MBL). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Muar Ban Lee Group Berhad with the means to add long-term value to shareholders.

Check out our latest analysis for Muar Ban Lee Group Berhad

How Fast Is Muar Ban Lee Group Berhad Growing?

Generally, companies experiencing growth in earnings per share (EPS) should see similar trends in share price. Therefore, there are plenty of investors who like to buy shares in companies that are growing EPS. Muar Ban Lee Group Berhad managed to grow EPS by 16% per year, over three years. That's a pretty good rate, if the company can sustain it.

It's often helpful to take a look at earnings before interest and tax (EBIT) margins, as well as revenue growth, to get another take on the quality of the company's growth. Muar Ban Lee Group Berhad shareholders can take confidence from the fact that EBIT margins are up from 5.7% to 8.8%, and revenue is growing. 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.


Muar Ban Lee Group Berhad isn't a huge company, given its market capitalisation of RM124m. That makes it extra important to check on its balance sheet strength.

Are Muar Ban Lee Group Berhad Insiders Aligned With All Shareholders?

As a general rule, it's worth considering how much the CEO is paid, since unreasonably high rates could be considered against the interests of shareholders. The median total compensation for CEOs of companies similar in size to Muar Ban Lee Group Berhad, with market caps under RM849m is around RM486k.

The CEO of Muar Ban Lee Group Berhad was paid just RM40k in total compensation for the year ending December 2021. This total may indicate that the CEO is sacrificing take home pay for performance-based benefits, ensuring that their motivations are synonymous with strong company results. While the level of CEO compensation shouldn't be the biggest factor in how the company is viewed, modest remuneration is a positive, because it suggests that the board keeps shareholder interests in mind. Generally, arguments can be made that reasonable pay levels attest to good decision-making.

Is Muar Ban Lee Group Berhad Worth Keeping An Eye On?

As previously touched on, Muar Ban Lee Group Berhad is a growing business, which is encouraging. To add to this, the modest CEO compensation should tell investors that the directors have an active interest in delivering the best for shareholders. So all in all Muar Ban Lee Group Berhad is worthy at least considering for your watchlist. What about risks? Every company has them, and we've spotted 1 warning sign for Muar Ban Lee Group Berhad you should know about.

The beauty of investing is that you can invest in almost any company you want. But if you prefer to focus on stocks that have demonstrated insider buying, here is a list of companies with insider buying in the last three months.

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

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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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