If You Like EPS Growth Then Check Out APN Convenience Retail REIT (ASX:AQR) Before It's Too Late

For beginners, it can seem like a good idea (and an exciting prospect) to buy a company that tells a good story to investors, even if it completely lacks a track record of revenue and profit. And in their study titled Who Falls Prey to the Wolf of Wall Street?' Leuz et. al. found that it is 'quite common' for investors to lose money by buying into 'pump and dump' schemes.

In contrast to all that, I prefer to spend time on companies like APN Convenience Retail REIT (ASX:AQR), which has not only revenues, but also profits. While profit is not necessarily a social good, it's easy to admire a business that can consistently produce it. 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.

Check out our latest analysis for APN Convenience Retail REIT

APN Convenience Retail REIT's Improving Profits

Over the last three years, APN Convenience Retail REIT has grown earnings per share (EPS) like young bamboo after rain; fast, and from a low base. So I don't think the percent growth rate is particularly meaningful. As a result, I'll zoom in on growth over the last year, instead. It's good to see that APN Convenience Retail REIT's EPS have grown from AU$0.20 to AU$0.23 over twelve months. I doubt many would complain about that 14% gain.

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. APN Convenience Retail REIT maintained stable EBIT margins over the last year, all while growing revenue 15% to AU$37m. That's a real positive.

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.

You don't drive with your eyes on the rear-view mirror, so you might be more interested in this free report showing analyst forecasts for APN Convenience Retail REIT's future profits.

Are APN Convenience Retail REIT Insiders Aligned With All Shareholders?

Like the kids in the streets standing up for their beliefs, insider share purchases give me reason to believe in a brighter future. 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 note that APN Convenience Retail REIT insiders spent AU$140k on stock, over the last year; in contrast, we didn't see any selling. That's nice to see, because it suggests insiders are optimistic. It is also worth noting that it was Independent Director of APN Funds Management Limited Howard Brenchley who made the biggest single purchase, worth AU$90k, paying AU$3.61 per share.

On top of the insider buying, it's good to see that APN Convenience Retail REIT insiders have a valuable investment in the business. To be specific, they have AU$17m worth of shares. That's a lot of money, and no small incentive to work hard. Despite being just 4.1% of the company, the value of that investment is enough to show insiders have plenty riding on the venture.

Does APN Convenience Retail REIT Deserve A Spot On Your Watchlist?

One important encouraging feature of APN Convenience Retail REIT is that it is growing profits. Better yet, insiders are significant shareholders, and have been buying more shares. That makes the company a prime candidate for my watchlist - and arguably a research priority. We should say that we've discovered 3 warning signs for APN Convenience Retail REIT that you should be aware of before investing here.

As a growth investor I do like to see insider buying. But APN Convenience Retail REIT 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. 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.
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