Some have more money than common sense, they say, so even companies with no income, no profit, and a history of failure can easily find investors. But as Warren Buffett said, “If you’ve been playing poker for half an hour and you still don’t know who the patsy is, you are the patsy.” When buying such historical stocks, investors are all too often the fools.
In the age of investing in the blue sky of tech stocks, my choice may seem old-fashioned; I always prefer profitable businesses like Industrial logistics property trust (NASDAQ: ILPT). While profit isn’t necessarily social good, it’s easy to admire a business that can consistently produce it. Conversely, a loss-making company has yet to prove itself with profit, and eventually the sweet milk of external capital can turn sour.
See our latest review for Industrial Logistics Properties Trust
How fast is confidence in industrial logistics properties increasing?
The market is a short-term voting machine, but a long-term weighing machine, so the stock price eventually follows earnings per share (EPS). Therefore, many investors like to buy stocks of companies with growing EPS. We can see that over the last three years Industrial Logistics Properties Trust has increased its EPS by 7.0% per year. It might not be particularly high growth, but it shows that earnings per share are steadily moving in the right direction.
I like to look at earnings before interest and tax margins (EBIT), as well as revenue growth, to get another idea of how well the business is growing. Industrial Logistics Properties Trust’s EBIT margins have actually improved 4.3 percentage points over the past year, to 46%, but, on the other hand, revenues are down 13%. It is not ideal.
The graph below shows how the company’s bottom line has progressed over time. To see the actual numbers, click on the graph.
Fortunately, we have access to the forecasts of the analysts of Industrial Logistics Properties Trust. future profits. You can make your own predictions without looking, or you can take a look at what the pros are predicting.
Are Industrial Logistics Property Trust Insiders Aligned with All Shareholders?
Like staying on the lookout, surveying the horizon at sunrise, insider buying, for some investors, brings joy. This view is based on the possibility that stock purchases signal an uptrend on behalf of the buyer. Of course, we can never be sure what insiders think, we can only judge their actions.
The good news for Industrial Logistics Properties Trust shareholders is that no insiders have reported selling any shares in the past year. So it’s really good that independent trustee Kevin Phelan bought US $ 13,000 worth of shares at an average price of around US $ 26.54.
It’s reassuring that Industrial Logistics Properties Trust insiders are buying the shares, but that’s not the only reason to believe that management is fair to shareholders. I’m talking about the very reasonable level of CEO compensation. For companies with a market capitalization between $ 1.0 billion and $ 3.2 billion, like Industrial Logistics Properties Trust, the median CEO salary is around $ 3.7 million.
The CEO of Industrial Logistics Properties Trust received total compensation of only US $ 492,000 in the year to. This is clearly well below par, so at first glance this arrangement seems generous to shareholders and indicates a culture of modest compensation. Although the level of CEO compensation is not a big factor in my view of the company, modest compensation is positive because it suggests that the board has the interests of shareholders in mind. It can also be a sign of good governance, more generally.
Is the Confidence of Industrial Logistics Properties Worth Watching?
An important encouraging feature of Industrial Logistics Properties Trust is that it increases its profits. And it’s not all, gentlemen. We also saw insiders buy stocks and noted modest executive pay. The sum of all this, to me, indicates a quality company, and a real prospect for further research. Before proceeding to the next step, you should know the 3 warning signs for Industrial Logistics Properties Trust (1 cannot be ignored!) That we discovered.
The good news is that Industrial Logistics Properties Trust isn’t the only growth stock buying from insiders. Here’s a list of them … with insider buys over the past three months!
Please note that the insider trading discussed in this article refers to reportable trades in the relevant jurisdiction.
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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 any stock 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 any of the stocks mentioned.