Do ESR-Logos REIT's (SGX:J91U) Earnings Warrant Your Attention?

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. 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.

In contrast to all that, I prefer to spend time on companies like ESR-Logos REIT (SGX:J91U), 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. In comparison, loss making companies act like a sponge for capital - but unlike such a sponge they do not always produce something when squeezed.

See our latest analysis for ESR-Logos REIT

How Fast Is ESR-Logos REIT Growing Its Earnings Per Share?

In a capitalist society capital chases profits, and that means share prices tend rise with earnings per share (EPS). So like the hint of a smile on a face that I love, growing EPS generally makes me look twice. It is therefore awe-striking that ESR-Logos REIT's EPS went from S$0.00079 to S$0.014 in just one year. When you see earnings grow that quickly, it often means good things ahead for the company.

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. I note that ESR-Logos REIT's revenue from operations was lower than its revenue in the last twelve months, so that could distort my analysis of its margins. ESR-Logos REIT shareholders can take confidence from the fact that EBIT margins are up from 62% to 66%, and revenue is growing. That's great to see, on both counts.

In the chart below, you can see how the company has grown earnings, and revenue, over time. For finer detail, click on the image.

While we live in the present moment at all times, there's no doubt in my mind that the future matters more than the past. So why not check this interactive chart depicting future EPS estimates, for ESR-Logos REIT?

Are ESR-Logos 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. 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.

One shining light for ESR-Logos REIT is the serious outlay one insider has made to buy shares, in the last year. Indeed, Tong Yulou has accumulated shares over the last year, paying a total of S$80m at an average price of about S$0.42. It doesn't get much better than that, in terms of large investments from insiders.

The good news, alongside the insider buying, for ESR-Logos REIT bulls is that insiders (collectively) have a meaningful investment in the stock. Indeed, they have a glittering mountain of wealth invested in it, currently valued at S$346m. That equates to 13% of the company, making insiders powerful and aligned with other shareholders. Very encouraging.

Should You Add ESR-Logos REIT To Your Watchlist?

ESR-Logos REIT's earnings per share growth have been levitating higher, like a mountain goat scaling the Alps. The cherry on top is that insiders own a bunch of shares, and one has been buying more. Because of the potential that it has reached an inflection point, I'd suggest ESR-Logos REIT belongs on the top of your watchlist. Don't forget that there may still be risks. For instance, we've identified 4 warning signs for ESR-Logos REIT (2 can't be ignored) you should be aware of.

There are plenty of other companies that have insiders buying up shares. So if you like the sound of ESR-Logos REIT, 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.