It’s only natural that many investors, especially those who are new to the game, prefer to buy shares in ‘sexy’ stocks with a good story, even if those businesses lose money. But as Warren Buffett has mused, ‘If you’ve been playing poker for half an hour and you still don’t know who the patsy is, you’re the patsy.’ When they buy such story stocks, investors are all too often the patsy.
So if you’re like me, you might be more interested in profitable, growing companies, like Artis Real Estate Investment Trust (TSE:AX.UN). Even if the shares are fully valued today, most capitalists would recognize its profits as the demonstration of steady value generation. While a well funded company may sustain losses for years, unless its owners have an endless appetite for subsidizing the customer, it will need to generate a profit eventually, or else breathe its last breath.
Artis Real Estate Investment Trust’s Earnings Per Share Are Growing.
If a company can keep growing earnings per share (EPS) long enough, its share price will eventually follow. That makes EPS growth an attractive quality for any company. Impressively, Artis Real Estate Investment Trust has grown EPS by 32% per year, compound, in the last three years. As a general rule, we’d say that if a company can keep up that sort of growth, shareholders will be smiling.
One way to double-check a company’s growth is to look at how its revenue, and earnings before interest and tax (EBIT) margins are changing. Unfortunately, revenue is down and so are margins. That is, not a hint of euphemism here, suboptimal.
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.
In investing, as in life, the future matters more than the past. So why not check out this free interactive visualization of Artis Real Estate Investment Trust’s forecast profits?
Are Artis Real Estate Investment Trust Insiders Aligned With All Shareholders?
Like standing at the lookout, surveying the horizon at sunrise, insider buying, for some investors, sparks joy. This view is based on the possibility that stock purchases signal bullishness on behalf of the buyer. Of course, we can never be sure what insiders are thinking, we can only judge their actions.
It’s a pleasure to note that insiders spent CA$21m buying Artis Real Estate Investment Trust shares, over the last year, without reporting any share sales whatsoever. As if for a flower bud approaching bloom, I become an expectant observer, anticipating with hope, that something splendid is coming. It is also worth noting that it was CEO & Trustee Samir Manji who made the biggest single purchase, worth CA$4.5m, paying CA$10.79 per share.
The good news, alongside the insider buying, for Artis Real Estate Investment Trust bulls is that insiders (collectively) have a meaningful investment in the stock. To be specific, they have CA$29m worth of shares. That’s a lot of money, and no small incentive to work hard. Despite being just 2.0% of the company, the value of that investment is enough to show insiders have plenty riding on the venture.
Is Artis Real Estate Investment Trust Worth Keeping An Eye On?
You can’t deny that Artis Real Estate Investment Trust has grown its earnings per share at a very impressive rate. That’s attractive. Not only that, but we can see that insiders both own a lot of, and are buying more, shares in the company. So I do think this is one stock worth watching. Still, you should learn about the 2 warning signs we’ve spotted with Artis Real Estate Investment Trust (including 1 which can’t be ignored) .
As a growth investor I do like to see insider buying. But Artis Real Estate Investment Trust 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.