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 Fortress Transportation and Infrastructure Investors (NYSE:FTAI). Even if the shares are fully valued today, most capitalists would recognize its profits as the demonstration of steady value generation. While a well funded company may sustain losses for years, unless its owners have an endless appetite for subsidizing the customer, it will need to generate a profit eventually, or else breathe its last breath.
How Fast Is Fortress Transportation and Infrastructure Investors 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 Fortress Transportation and Infrastructure Investors's EPS went from US$0.17 to US$1.36 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. Fortress Transportation and Infrastructure Investors shareholders can take confidence from the fact that EBIT margins are up from 13% to 16%, and revenue is growing. Ticking those two boxes is a good sign of growth, in my book.
You can take a look at the company's revenue and earnings growth trend, in the chart below. For finer detail, click on the image.
In investing, as in life, the future matters more than the past. So why not check out this free interactive visualization of Fortress Transportation and Infrastructure Investors's forecast profits?
Are Fortress Transportation and Infrastructure Investors 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. 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.
It's good to see Fortress Transportation and Infrastructure Investors insiders walking the walk, by spending US$331k on shares in just twelve months. When you contrast that with the complete lack of sales, it's easy for shareholders to brim with joyful expectancy. It is also worth noting that it was Director Kenneth Nicholson who made the biggest single purchase, worth US$216k, paying US$7.19 per share.
On top of the insider buying, it's good to see that Fortress Transportation and Infrastructure Investors insiders have a valuable investment in the business. To be specific, they have US$16m worth of shares. That's a lot of money, and no small incentive to work hard. Despite being just 1.0% of the company, the value of that investment is enough to show insiders have plenty riding on the venture.
Does Fortress Transportation and Infrastructure Investors Deserve A Spot On Your Watchlist?
Fortress Transportation and Infrastructure Investors's earnings per share growth have been levitating higher, like a mountain goat scaling the Alps. What's more insiders own a significant stake in the company and have been buying more shares. Because of the potential that it has reached an inflection point, I'd suggest Fortress Transportation and Infrastructure Investors belongs on the top of your watchlist. It is worth noting though that we have found 4 warning signs for Fortress Transportation and Infrastructure Investors (2 don't sit too well with us!) that you need to take into consideration.
There are plenty of other companies that have insiders buying up shares. So if you like the sound of Fortress Transportation and Infrastructure Investors, 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.
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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