Should You Be Adding Industrial Logistics Properties Trust (NASDAQ:ILPT) 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 Warren Buffett has mused, 'If you've been playing poker for half an hour and you still don't know who the patsy is, you're the patsy.' When they buy such story stocks, investors are all too often the patsy.

In the age of tech-stock blue-sky investing, my choice may seem old fashioned; I still prefer profitable companies like Industrial Logistics Properties Trust (NASDAQ:ILPT). While profit is not necessarily a social good, it's easy to admire a business that can consistently produce it. Conversely, a loss-making company is yet to prove itself with profit, and eventually the sweet milk of external capital may run sour.

See our latest analysis for Industrial Logistics Properties Trust

How Fast Is Industrial Logistics Properties Trust Growing?

The market is a voting machine in the short term, but a weighing machine in the long term, so share price follows earnings per share (EPS) eventually. Therefore, there are plenty of investors who like to buy shares in companies that are growing EPS. We can see that in the last three years Industrial Logistics Properties Trust grew its EPS by 7.0% per year. That might not be particularly high growth, but it does show that per-share earnings are moving steadily in the right direction.

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. Industrial Logistics Properties Trust's EBIT margins have actually improved by 4.3 percentage points in the last year, to reach 46%, but, on the flip side, revenue was down 13%. That's not ideal.

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 Industrial Logistics Properties 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 Industrial Logistics Properties Trust Insiders Aligned With All Shareholders?

Like standing at the lookout, surveying the horizon at sunrise, insider buying, for some investors, sparks joy. This view is based on the possibility that stock purchases signal bullishness on behalf of the buyer. Of course, we can never be sure what insiders are thinking, we can only judge their actions.

The good news for Industrial Logistics Properties Trust shareholders is that no insiders reported selling shares in the last year. So it's definitely nice that Independent Trustee Kevin Phelan bought US$13k worth of shares at an average price of around US$26.54.

It's reassuring that Industrial Logistics Properties Trust insiders are buying the stock, but that's not the only reason to think management are fair to shareholders. I refer to the very reasonable level of CEO pay. For companies with market capitalizations between US$1.0b and US$3.2b, like Industrial Logistics Properties Trust, the median CEO pay is around US$3.7m.

The Industrial Logistics Properties Trust CEO received total compensation of just US$492k in the year to . That's clearly well below average, so at a glance, that arrangement seems generous to shareholders, and points to a modest remuneration culture. While the level of CEO compensation isn't a huge factor in my view of the company, modest remuneration is a positive, because it suggests that the board keeps shareholder interests in mind. It can also be a sign of good governance, more generally.

Is Industrial Logistics Properties Trust Worth Keeping An Eye On?

One important encouraging feature of Industrial Logistics Properties Trust is that it is growing profits. And that's not all, folks. We've also seen insiders buying stock, and noted modest executive pay. The sum of all that, for me, points to a quality business, and a genuine prospect for further research. Before you take the next step you should know about the 3 warning signs for Industrial Logistics Properties Trust (1 can't be ignored!) that we have uncovered.

The good news is that Industrial Logistics Properties Trust is not the only growth stock with insider buying. Here's a list of them... with insider buying in the last three months!

Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.