Is Now The Time To Put Amkor Technology (NASDAQ:AMKR) On Your Watchlist?
Some have more dollars than sense, they say, so even companies that have no revenue, no profit, and a record of falling short, can easily find investors. 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.
If, on the other hand, you like companies that have revenue, and even earn profits, then you may well be interested in Amkor Technology (NASDAQ:AMKR). While profit is not necessarily a social good, it's easy to admire a business that can consistently produce it. Conversely, a loss-making company is yet to prove itself with profit, and eventually the sweet milk of external capital may run sour.
View our latest analysis for Amkor Technology
How Fast Is Amkor Technology Growing Its Earnings Per Share?
In the last three years Amkor Technology's earnings per share took off like a rocket; fast, and from a low base. So the actual rate of growth doesn't tell us much. Thus, it makes sense to focus on more recent growth rates, instead. Like a firecracker arcing through the night sky, Amkor Technology's EPS shot from US$1.40 to US$2.63, over the last year. You don't see 88% year-on-year growth like that, very often.
I like to take a look at earnings before interest and (EBIT) tax margins, as well as revenue growth, to get another take on the quality of the company's growth. Amkor Technology shareholders can take confidence from the fact that EBIT margins are up from 9.4% to 12%, and revenue is growing. Ticking those two boxes is a good sign of growth, in my book.
The chart below shows how the company's bottom and top lines have progressed over time. For finer detail, click on the image.
While profitability drives the upside, prudent investors always check the balance sheet, too.
Are Amkor Technology Insiders Aligned With All Shareholders?
Like that fresh smell in the air when the rains are coming, insider buying fills me with optimistic anticipation. This view is based on the possibility that stock purchases signal bullishness on behalf of the buyer. However, insiders are sometimes wrong, and we don't know the exact thinking behind their acquisitions.
We do note that, in the last year, insiders sold -US$562k worth of shares. But that's far less than the US$137m insiders spend purchasing stock. This makes me even more interested in Amkor Technology because it suggests that those who understand the company best, are optimistic. Zooming in, we can see that the biggest insider purchase was by Executive Chairman of the Board James Kim for US$92m worth of shares, at about US$24.68 per share.
On top of the insider buying, we can also see that Amkor Technology insiders own a large chunk of the company. In fact, they own 50% of the shares, making insiders a very influential shareholder group. I'm always comforted by solid insider ownership like this, as it implies that those running the business are genuinely motivated to create shareholder value. At the current share price, that insider holding is worth a whopping US$2.7b. That means they have plenty of their own capital riding on the performance of the business!
Is Amkor Technology Worth Keeping An Eye On?
Amkor Technology's earnings per share have taken off like a rocket aimed right at the moon. Just as heartening; insiders both own and are buying more stock. Because of the potential that it has reached an inflection point, I'd suggest Amkor Technology belongs on the top of your watchlist. It is worth noting though that we have found 1 warning sign for Amkor Technology that you need to take into consideration.
As a growth investor I do like to see insider buying. But Amkor Technology isn't the only one. You can see a a free list of them here.
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.
