Do Investors Real Estate Trust's (NYSE:CSR) Earnings Warrant Your Attention?

By
Simply Wall St
Published
February 02, 2021
NYSE:CSR
Source: Shutterstock

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.'

In the age of tech-stock blue-sky investing, my choice may seem old fashioned; I still prefer profitable companies like Investors Real Estate Trust (NYSE:CSR). While profit is not necessarily a social good, it's easy to admire a business that can consistently produce it. Loss-making companies are always racing against time to reach financial sustainability, but time is often a friend of the profitable company, especially if it is growing.

See our latest analysis for Investors Real Estate Trust

Investors Real Estate Trust's Improving Profits

In the last three years Investors Real Estate Trust's earnings per share took off like a rocket; fast, and from a low base. So the actual rate of growth doesn't tell us much. Thus, it makes sense to focus on more recent growth rates, instead. It's good to see that Investors Real Estate Trust's EPS have grown from US$3.54 to US$4.16 over twelve months. That's a 17% gain; respectable growth in the broader scheme of things.

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. To cut to the chase Investors Real Estate Trust's EBIT margins dropped last year, and so did its revenue. That is, not a hint of euphemism here, suboptimal.

You can take a look at the company's revenue and earnings growth trend, in the chart below. To see the actual numbers, click on the chart.

earnings-and-revenue-history
NYSE:CSR Earnings and Revenue History February 3rd 2021

In investing, as in life, the future matters more than the past. So why not check out this free interactive visualization of Investors Real Estate Trust's forecast profits?

Are Investors Real Estate Trust Insiders Aligned With All Shareholders?

Like that fresh smell in the air when the rains are coming, insider buying fills me with optimistic anticipation. 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.

In the last twelve months Investors Real Estate Trust insiders spent US$49k on stock; good news for shareholders. While this isn't much, we also note an absence of sales.

I do like that insiders have been buying shares in Investors Real Estate Trust, but there is more evidence of shareholder friendly management. I refer to the very reasonable level of CEO pay. For companies with market capitalizations between US$400m and US$1.6b, like Investors Real Estate Trust, the median CEO pay is around US$2.4m.

Investors Real Estate Trust offered total compensation worth US$1.6m to its CEO in the year to . That comes in below the average for similar sized companies, and seems pretty reasonable to me. 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 a culture of integrity, in a broader sense.

Does Investors Real Estate Trust Deserve A Spot On Your Watchlist?

One positive for Investors Real Estate Trust is that it is growing EPS. That's nice to see. Like chocolate chips in vanilla ice cream, the insider buying, and modest CEO pay, make it better. If that doesn't automatically earn it a spot on your watchlist then I'd posit it warrants a closer look at the very least. It is worth noting though that we have found 5 warning signs for Investors Real Estate Trust (2 can't be ignored!) that you need to take into consideration.

The good news is that Investors Real Estate 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.

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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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