CapitaLand Integrated Commercial Trust (SGX:C38U) Ticks All The Boxes When It Comes To Earnings Growth

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 CapitaLand Integrated Commercial Trust (SGX:C38U), 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.

See our latest analysis for CapitaLand Integrated Commercial Trust

CapitaLand Integrated Commercial Trust's Improving Profits

Even with very modest growth rates, a company will usually do well if it improves earnings per share (EPS) year after year. So EPS growth can certainly encourage an investor to take note of a stock. It's good to see that CapitaLand Integrated Commercial Trust's EPS has grown from S$0.15 to S$0.18 over twelve months. That's a 17% gain; respectable growth in the broader scheme of things.

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. CapitaLand Integrated Commercial Trust maintained stable EBIT margins over the last year, all while growing revenue 26% to S$1.3b. That's a real positive.

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.

Fortunately, we've got access to analyst forecasts of CapitaLand Integrated Commercial Trust's future profits. You can do your own forecasts without looking, or you can take a peek at what the professionals are predicting.

Are CapitaLand Integrated Commercial Trust Insiders Aligned With All Shareholders?

It's said that there's no smoke without fire. For investors, insider buying is often the smoke that indicates which stocks could set the market alight. Because often, 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.

It's nice to see that there have been no reports of any insiders selling shares in CapitaLand Integrated Commercial Trust in the previous 12 months. Add in the fact that Swee-Lian Teo, the Independent Chairman of CapitaLand Integrated Commercial Trust Management Limited of the company, paid S$27k for shares at around S$2.28 each. Decent buying like this could be a sign for shareholders here; management sees the company as undervalued.

Should You Add CapitaLand Integrated Commercial Trust To Your Watchlist?

One important encouraging feature of CapitaLand Integrated Commercial Trust is that it is growing profits. Not every business can grow its EPS, but CapitaLand Integrated Commercial Trust certainly can. The icing on the cake is that an insider bought shares during the year; a point of interest for people who will want to keep a watchful eye on this stock. Don't forget that there may still be risks. For instance, we've identified 5 warning signs for CapitaLand Integrated Commercial Trust (2 don't sit too well with us) you should be aware of.

There are plenty of other companies that have insiders buying up shares. So if you like the sound of CapitaLand Integrated Commercial Trust, 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.