Should You Be Adding Gaming and Leisure Properties (NASDAQ:GLPI) To Your Watchlist Today?

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 as Peter Lynch said in One Up On Wall Street, 'Long shots almost never pay off.'

If, on the other hand, you like companies that have revenue, and even earn profits, then you may well be interested in Gaming and Leisure Properties (NASDAQ:GLPI). While that doesn't make the shares worth buying at any price, you can't deny that successful capitalism requires profit, eventually. Conversely, a loss-making company is yet to prove itself with profit, and eventually the sweet milk of external capital may run sour.

View our latest analysis for Gaming and Leisure Properties

How Quickly Is Gaming and Leisure Properties Increasing Earnings Per Share?

As one of my mentors once told me, share price follows earnings per share (EPS). It's no surprise, then, that I like to invest in companies with EPS growth. We can see that in the last three years Gaming and Leisure Properties grew its EPS by 8.6% per year. That's a pretty good rate, if the company can sustain it.

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. Not all of Gaming and Leisure Properties's revenue this year is revenue from operations, so keep in mind the revenue and margin numbers I've used might not be the best representation of the underlying business. While revenue is looking a bit flat, the good news is EBIT margins improved by 4.0 percentage points to 67%, in the last twelve months. That's something to smile about.

In the chart below, you can see how the company has grown earnings, and revenue, over time. To see the actual numbers, click on the chart.

You don't drive with your eyes on the rear-view mirror, so you might be more interested in this free report showing analyst forecasts for Gaming and Leisure Properties's future profits.

Are Gaming and Leisure Properties 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.

We do note that, in the last year, insiders sold -US$580k worth of shares. But that's far less than the US$2.7m insiders spend purchasing stock. This makes me even more interested in Gaming and Leisure Properties because it suggests that those who understand the company best, are optimistic. We also note that it was the Chairman, Peter Carlino, who made the biggest single acquisition, paying US$1.0m for shares at about US$30.45 each.

The good news, alongside the insider buying, for Gaming and Leisure Properties bulls is that insiders (collectively) have a meaningful investment in the stock. Notably, they have an enormous stake in the company, worth US$553m. This suggests to me that leadership will be very mindful of shareholders' interests when making decisions!

Should You Add Gaming and Leisure Properties To Your Watchlist?

As I already mentioned, Gaming and Leisure Properties is a growing business, which is what I like to see. Better yet, insiders are significant shareholders, and have been buying more shares. That makes the company a prime candidate for my watchlist - and arguably a research priority. Still, you should learn about the 4 warning signs we've spotted with Gaming and Leisure Properties (including 1 which can't be ignored) .

As a growth investor I do like to see insider buying. But Gaming and Leisure Properties 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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This article by Simply Wall St is general in nature. 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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