Yahoo Finance Do Postal Realty Trust's (NYSE:PSTL) Earnings Warrant Your Attention?
For beginners, it can seem like a good idea (and an exciting prospect) to buy a company that tells a good story to investors, even if it currently lacks a track record of revenue and profit. Sometimes these stories can cloud the minds of investors, leading them to invest with their emotions rather than on the merit of good company fundamentals. Loss making companies can act like a sponge for capital - so investors should be cautious that they're not throwing good money after bad.
Despite being in the age of tech-stock blue-sky investing, many investors still adopt a more traditional strategy; buying shares in profitable companies like Postal Realty Trust (NYSE:PSTL). Now this is not to say that the company presents the best investment opportunity around, but profitability is a key component to success in business.
View our latest analysis for Postal Realty Trust
How Fast Is Postal Realty Trust Growing Its Earnings Per Share?
In the last three years Postal Realty Trust's earnings per share took off; so much so that it's a bit disingenuous to use these figures to try and deduce long term estimates. Thus, it makes sense to focus on more recent growth rates, instead. Postal Realty Trust's EPS shot up from US$0.10 to US$0.14; a result that's bound to keep shareholders happy. That's a fantastic gain of 42%.
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. It's noted that Postal Realty Trust's revenue from operations was lower than its revenue in the last twelve months, so that could distort our analysis of its margins. The music to the ears of Postal Realty Trust shareholders is that EBIT margins have grown from 15% to 18% in the last 12 months and revenues are on an upwards trend as well. 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. Click on the chart to see the exact numbers.
In investing, as in life, the future matters more than the past. So why not check out this free interactive visualization of Postal Realty Trust's forecast profits?
Are Postal Realty 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. This view is based on the possibility that stock purchases signal bullishness on behalf of the buyer. However, insiders are sometimes wrong, and we don't know the exact thinking behind their acquisitions.
Not only did Postal Realty Trust insiders refrain from selling stock during the year, but they also spent US$65k buying it. That paints the company in a nice light, as it signals that its leaders are feeling confident in where the company is heading. We also note that it was the Independent Chairman of the Board, Patrick Donahoe, who made the biggest single acquisition, paying US$50k for shares at about US$16.48 each.
On top of the insider buying, it's good to see that Postal Realty Trust insiders have a valuable investment in the business. Indeed, they hold US$19m worth of its stock. That shows significant buy-in, and may indicate conviction in the business strategy. That amounts to 5.4% of the company, demonstrating a degree of high-level alignment with shareholders.
Is Postal Realty Trust Worth Keeping An Eye On?
For growth investors, Postal Realty Trust's raw rate of earnings growth is a beacon in the night. Not only that, but we can see that insiders both own a lot of, and are buying more shares in the company. Astute investors will want to keep this stock on watch. We don't want to rain on the parade too much, but we did also find 5 warning signs for Postal Realty Trust (2 are significant!) that you need to be mindful of.
There are plenty of other companies that have insiders buying up shares. So if you like the sound of Postal Realty 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.
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