Here's Why I Think Elanor Commercial Property Fund (ASX:ECF) Might Deserve Your Attention Today

By
Simply Wall St
Published
August 30, 2021
ASX:ECF
Source: Shutterstock

Some have more dollars than sense, they say, so even companies that have no revenue, no profit, and a record of falling short, can easily find investors. 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 the age of tech-stock blue-sky investing, my choice may seem old fashioned; I still prefer profitable companies like Elanor Commercial Property Fund (ASX:ECF). While that doesn't make the shares worth buying at any price, you can't deny that successful capitalism requires profit, eventually. Loss-making companies are always racing against time to reach financial sustainability, but time is often a friend of the profitable company, especially if it is growing.

Check out our latest analysis for Elanor Commercial Property Fund

How Fast Is Elanor Commercial Property Fund Growing Its Earnings Per Share?

Even modest earnings per share growth (EPS) can create meaningful value, when it is sustained reliably from year to year. So EPS growth can certainly encourage an investor to take note of a stock. Like a falcon taking flight, Elanor Commercial Property Fund's EPS soared from AU$0.052 to AU$0.07, over the last year. That's a impressive gain of 34%.

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. Elanor Commercial Property Fund maintained stable EBIT margins over the last year, all while growing revenue 28% to AU$39m. That's progress.

You can take a look at the company's revenue and earnings growth trend, in the chart below. For finer detail, click on the image.

earnings-and-revenue-history
ASX:ECF Earnings and Revenue History August 30th 2021

The trick, as an investor, is to find companies that are going to perform well in the future, not just in the past. To that end, right now and today, you can check our visualization of consensus analyst forecasts for future Elanor Commercial Property Fund EPS 100% free.

Are Elanor Commercial Property Fund 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. Because oftentimes, the purchase of stock is a sign that the buyer views it as undervalued. However, insiders are sometimes wrong, and we don't know the exact thinking behind their acquisitions.

Not only did Elanor Commercial Property Fund insiders refrain from selling stock during the year, but they also spent AU$113k buying it. That's nice to see, because it suggests insiders are optimistic. It is also worth noting that it was Independent Non-Executive Chairman of Elanor Funds Management Limited Paul Bedbrook who made the biggest single purchase, worth AU$53k, paying AU$1.07 per share.

Does Elanor Commercial Property Fund Deserve A Spot On Your Watchlist?

For growth investors like me, Elanor Commercial Property Fund's raw rate of earnings growth is a beacon in the night. Not only is that growth rate rather juicy, but the insider buying makes my mouth water. To put it succinctly; Elanor Commercial Property Fund is a strong candidate for your watchlist. Still, you should learn about the 4 warning signs we've spotted with Elanor Commercial Property Fund (including 1 which is potentially serious) .

As a growth investor I do like to see insider buying. But Elanor Commercial Property Fund 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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