NCT Alliance Berhads (KLSE: NCT) The robust earnings report failed to move the market for its stock. Our analysis suggests that this could be because shareholders have noticed some underlying factors.
Check out our latest analysis for NCT Alliance Berhad
KLSE: NCT earnings and sales history September 14, 2021
To understand the potential return per share, it’s important to consider how much a company dilutes shareholders. NCT Alliance Berhad increased the number of shares issued by 45% last year. Therefore, each share now receives a smaller share of the profit. Talking about net income without realizing earnings per share means getting distracted by the big numbers while ignoring the smaller numbers that speak to value per share. Check out NCT Alliance Berhad’s historic EPS growth by clicking this link.
How does the dilution affect NCT Alliance Berhad’s earnings per share? (EPS)
Unfortunately, three years ago we did not have any insight into earnings because we lack the data. Looking at last year, we still cannot talk coherently about growth rates as it made losses last year. What we do know is that while it’s great to see profit over the past twelve months, those earnings per share would have been better if the company hadn’t had to issue shares. Hence, it can be seen that the dilution has a fairly strong impact on shareholder returns.
If NCT Alliance Berhad’s earnings per share can grow over the long term, so should its share price. On the other hand, however, we would be far less happy if earnings (but not EPS) improved. For this reason, it could be said that earnings per share are more important than net income in the long run, assuming the goal is to gauge whether a company’s share price could rise.
Note: We always recommend investors to check the balance sheet strength. Click here to go to our balance sheet analysis of the NCT Alliance Berhad.
Our assessment of the profit performance of the NCT Alliance Berhad
Last year the NCT Alliance Berhad issued new shares, and as such, there is a notable divergence between earnings per share and net profit growth. Because of this, we believe that NCT Alliance Berhad’s statutory profits are a poor guide to underlying profitability and could give investors an overly positive impression of the company. On the plus side, the company has shown enough improvement to post a profit this year after losing money last year. The aim of this article was to assess how well we can rely on the statutory income to reflect the company’s potential, but there is much more to consider. So while the quality of returns is important, it is equally important to consider the risks NCT Alliance Berhad is facing at this point in time. When we did our research, we found 4 warning signs for NCT Alliance Berhad (1 cannot be ignored!) Which in our opinion deserve your full attention.
Only one factor has been considered in this note that is indicative of the nature of NCT Alliance Berhad’s profit. But there are many other ways you can give your opinion on a company. For example, many people view a high return on equity as an indicator of good business performance, while others like to “follow the money” looking for stocks that insiders are buying. Even if it takes a little research on your behalf, you may find this for free Collection of high return on equity companies or this list of stocks that insiders are buying to be useful.
If you want to trade a wide range of investments, open an account with the lowest cost * platform trusted by the pros, Interactive Brokers. Your clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide through a single integrated account. Funded
This article from Simply Wall St is of a general nature. We only provide comments based on historical data and analyst projections using an unbiased methodology, and our articles are not intended as financial advice. It is not a recommendation to buy or sell stocks and does not take into account your goals or your financial situation. Our goal is to provide you with long-term, focused analysis based on fundamentals. Note that our analysis may not take into account the latest company announcements or quality material, which may be sensitive to the price. Simply Wall St has no position in the stocks mentioned.
* Interactive Brokers rated as the lowest cost broker by StockBrokers.com Annual Online Review 2020
Do you have any feedback on this article? Concerned about the content? Get in touch directly with us. Alternatively, send an email to the editorial team (at) simplywallst.com.