Is Now The Time To Put Fairplay Properties REIT (BUL:FPP) On Your Watchlist?

The excitement of investing in a company that can reverse its fortunes is a big draw for some speculators, so even companies that have no revenue, no profit, and a record of falling short, can manage to find investors. But the reality is that when a company loses money each year, for long enough, its investors will usually take their share of those losses. While a well funded company may sustain losses for years, it will need to generate a profit eventually, or else investors will move on and the company will wither away.

In contrast to all that, many investors prefer to focus on companies like Fairplay Properties REIT (BUL:FPP), which has not only revenues, but also profits. While profit isn't the sole metric that should be considered when investing, it's worth recognising businesses that can consistently produce it.

View our latest analysis for Fairplay Properties REIT

How Fast Is Fairplay Properties REIT Growing Its Earnings Per Share?

In the last three years Fairplay Properties REIT's earnings per share took off; so much so that it's a bit disingenuous to use these figures to try and deduce long term estimates. Thus, it makes sense to focus on more recent growth rates, instead. In impressive fashion, Fairplay Properties REIT's EPS grew from лв0.04 to лв0.069, over the previous 12 months. It's a rarity to see 71% year-on-year growth like that.

Careful consideration of revenue growth and earnings before interest and taxation (EBIT) margins can help inform a view on the sustainability of the recent profit growth. It's noted that Fairplay Properties REIT's revenue from operations was lower than its revenue in the last twelve months, so that could distort our analysis of its margins. The good news is that Fairplay Properties REIT is growing revenues, and EBIT margins improved by 7.8 percentage points to 32%, over the last year. Ticking those two boxes is a good sign of growth, in our book.

The chart below shows how the company's bottom and top lines have progressed over time. For finer detail, click on the image.

Since Fairplay Properties REIT is no giant, with a market capitalisation of лв67m, you should definitely check its cash and debt before getting too excited about its prospects.

Are Fairplay Properties REIT Insiders Aligned With All Shareholders?

It's pleasing to see company leaders with putting their money on the line, so to speak, because it increases alignment of incentives between the people running the business, and its true owners. Fairplay Properties REIT followers will find comfort in knowing that insiders have a significant amount of capital that aligns their best interests with the wider shareholder group. As a matter of fact, their holding is valued at лв22m. That shows significant buy-in, and may indicate conviction in the business strategy. That amounts to 33% of the company, demonstrating a degree of high-level alignment with shareholders.

Should You Add Fairplay Properties REIT To Your Watchlist?

Fairplay Properties REIT's earnings per share growth have been climbing higher at an appreciable rate. That sort of growth is nothing short of eye-catching, and the large investment held by insiders should certainly brighten the view of the company. At times fast EPS growth is a sign the business has reached an inflection point, so there's a potential opportunity to be had here. So at the surface level, Fairplay Properties REIT is worth putting on your watchlist; after all, shareholders do well when the market underestimates fast growing companies. Even so, be aware that Fairplay Properties REIT is showing 5 warning signs in our investment analysis , and 3 of those shouldn't be ignored...

Although Fairplay Properties REIT certainly looks good, it may appeal to more investors if insiders were buying up shares. If you like to see insider buying, then this free list of growing companies that insiders are buying, could be exactly what you're looking for.

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.