Here's Why I Think Axiom Properties (ASX:AXI) Might Deserve Your Attention Today

Like a puppy chasing its tail, some new investors often chase 'the next big thing', even if that means buying 'story stocks' without revenue, let alone profit. But as Peter Lynch said in One Up On Wall Street, 'Long shots almost never pay off.'

So if you're like me, you might be more interested in profitable, growing companies, like Axiom Properties (ASX:AXI). Now, I'm not saying that the stock is necessarily undervalued today; but I can't shake an appreciation for the profitability of the business itself. Conversely, a loss-making company is yet to prove itself with profit, and eventually the sweet milk of external capital may run sour.

See our latest analysis for Axiom Properties

Axiom Properties's Earnings Per Share Are Growing.

The market is a voting machine in the short term, but a weighing machine in the long term, so share price follows earnings per share (EPS) eventually. That makes EPS growth an attractive quality for any company. Axiom Properties managed to grow EPS by 13% per year, over three years. That's a pretty good rate, if the company can sustain it.

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. Axiom Properties shareholders can take confidence from the fact that EBIT margins are up from 3.9% to 18%, and revenue is growing. That's great to see, on both counts.

The chart below shows how the company's bottom and top lines have progressed over time. To see the actual numbers, click on the chart.

Since Axiom Properties is no giant, with a market capitalization of AU$35m, so you should definitely check its cash and debt before getting too excited about its prospects.

Are Axiom Properties Insiders Aligned With All Shareholders?

Like standing at the lookout, surveying the horizon at sunrise, insider buying, for some investors, sparks joy. Because oftentimes, the purchase of stock is a sign that the buyer views it as undervalued. Of course, we can never be sure what insiders are thinking, we can only judge their actions.

We do note that Axiom Properties insiders netted -AU$42k worth of shares over the last year. But the silver lining to that cloud is that Benjamin Laurance, the MD & Executive Director, spent AU$78k buying shares at an average price of AU$0.063. And that's a reason to be optimistic.

Does Axiom Properties Deserve A Spot On Your Watchlist?

One positive for Axiom Properties is that it is growing EPS. That's nice to see. Not every business can grow its EPS, but Axiom Properties certainly can. The icing on the cake is that an insider bought shares during the year, which inclines me to put this one on a watchlist. We should say that we've discovered 3 warning signs for Axiom Properties (1 is a bit concerning!) that you should be aware of before investing here.

There are plenty of other companies that have insiders buying up shares. So if you like the sound of Axiom Properties, you'll probably love this free list of growing companies that insiders are buying.

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.
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