Some have more money than common sense, they say, so even businesses with no income, no profit, and a record of failure can easily find investors. And in their study entitled Who is the prey of the Wolf of Wall Street? ‘ Leuz and. Al have found that it is “quite common” for investors to lose money by purchasing “pump and dump” programs.

If, on the other hand, you like businesses that have revenue, and even profits, then you might be interested in OP Bancorp (NASDAQ: OPBK). While that doesn’t make stocks worth buying at all costs, you can’t deny that successful capitalism ultimately requires profits. Conversely, a loss-making company has yet to prove itself with profit, and eventually the sweet milk of external capital can turn sour.

OP Bancorp’s earnings per share are growing.

If you think the markets are even vaguely efficient, then in the long run you would expect a company’s stock price to follow its earnings per share (EPS). This makes BPA growth an attractive quality for any business. OP Bancorp has managed to increase its EPS by 15% per year, over three years. It’s a great rate, if the company can keep it up.

I like to see revenue growth as an indication that growth is sustainable, and I look for a high profit margin before interest and taxes (EBIT) to indicate a competitive gap (although some low-margin companies also have ditches). I note that the income of OP Bancorp operations was lower than its turnover for the last twelve months, which could skew my analysis of its margins. OP Bancorp has maintained stable EBIT margins over the past year, while increasing revenues by 19% to US $ 60 million. It’s really positive.

The graph below shows how the company’s bottom line has progressed over time. To see the actual numbers, click on the graph.

NasdaqGM: Revenue and Revenue History of OPBK September 27, 2021

You don’t drive with your eyes on the rearview mirror, so this may be of more interest to you free report showing analyst forecasts for OP Bancorp’s future profits.

Are OP Bancorp insiders aligned with all shareholders?

I like that business leaders have some skin in the game, so to speak, because it increases the alignment of incentives between the people who run the business and its real owners. So it is good to see that the insiders of OP Bancorp have a significant amount of capital invested in the stock. Indeed, they hold 32 million US dollars of its shares. That’s a lot of money, and that’s no small incentive to work hard. This represents 21% of the company, demonstrating a high level of alignment with shareholders.

Does OP Bancorp deserve a spot on your watchlist?

As I mentioned before, OP Bancorp is a growing company, that’s what I like to see. Just as polishing shatters silverware, the high level of insider ownership bolsters my enthusiasm for this growth. The combination brings joy to me, so I would consider keeping the company on a watch list. However, you should always think about the risks. Concrete example, we have spotted 2 warning signs for OP Bancorp you need to be aware of it, and one of them is important.

You can invest in any business. But if you’d rather focus on stocks that have demonstrated insider buying, here’s a list of companies that have made insider buying in the past three months.

Please note that the insider trading discussed in this article refers to reportable trades in the relevant jurisdiction.

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 be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in the mentioned stocks.

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