Here’s why we think Embassy Office Parks REIT (NSE:EMBASSY) is worth watching
It is common for many investors, especially those who are inexperienced, to buy shares in companies that have a good history, even if those companies are loss-making. Unfortunately, these high-risk investments are often unlikely to ever return, and many investors pay a price to learn their lesson. Although a well-funded business may suffer losses for years, it will eventually have to turn a profit or investors will move on and the business will wither away.
If this type of business isn’t your style, and you like businesses that generate revenue or even profit, then you might be interested in Embassy Office Parks REIT (NSE: EMBASSY). While that doesn’t necessarily mean it’s undervalued, the company’s profitability is enough to warrant some appreciation, especially if it’s growing.
See our latest analysis for Embassy Office Parks REIT
Embassy Office Parks REIT improves earnings
Even with very modest growth rates, a company will generally do well if it improves its earnings per share (EPS) year after year. So it’s easy to see why many investors are focused on EPS growth. The EPS of Embassy Office Parks REIT increased over the past 12 months from ₹8.09 to ₹9.10. There is no doubt that shareholders would be satisfied with this 12% gain.
One way to check a company’s growth is to look at the evolution of its revenues and its earnings before interest and taxes (EBIT) margins. Our analysis showed that the revenues of Embassy Office Parks REIT operations has not accounted for all of its revenue in the previous 12 months, so our analysis of its margins may not accurately reflect the underlying business. On the revenue front, Embassy Office Parks REIT has performed well over the past year, growing revenue by 18% to ₹32 billion, but EBIT margin figures have been less stellar, registering a decline over the past year. of the last 12 months. So if EBIT margins can stabilize, this top line growth should pay off for shareholders.
The chart below shows how the company’s top and bottom line has grown over time. For more details, click on the image.
Luckily, we have access to analyst forecasts from Embassy Office Parks REIT coming profits. You can make your own predictions without looking, or you can take a peek at what the pros are predicting.
Are Embassy Office Parks REIT Insiders Aligned with All Shareholders?
It is said that there is no smoke without fire. For investors, insider buying is often the smoke that indicates which stocks might ignite the market. This view is based on the possibility that stock purchases signal an uptrend on behalf of the buyer. Of course, we can never be sure what insiders are thinking, we can only judge their actions.
In the previous 12 months, we see company insiders have sold £88m worth of Embassy Office Parks REIT shares. But the silver lining of this cloud is that Vikaash Khdloya, CEO and COO of Embassy Office Parks Management Services Private Limited, spent ₹90 million buying shares at an average price of ₹389. And that’s a reason for optimism.
In addition to insider buying, it’s good to see that Embassy Office Parks REIT insiders have a valuable investment in the company. Indeed, they have invested a considerable amount of wealth there, currently valued at ₹10 billion. Investors will appreciate that management has so much skin in the game, as it shows their commitment to the future of the company.
Is Embassy Office Parks REIT Worth Watching?
A positive for Embassy Office Parks REIT is that it increases EPS. It’s nice to see. Additionally, insiders have been busy increasing their large stakes in the company. That makes the company a prime candidate for your watchlist — and arguably a search priority. What about the risks? Every business has them, and we’ve spotted 2 warning signs for Embassy Office Parks REIT (1 of which can’t be ignored!) that you should know about.
There are many other companies whose insiders buy shares. So if you like the sound of Embassy Office Parks REIT, you’ll probably love this free list of growing companies insiders are buying.
Please note that insider trading discussed in this article refers to reportable trading in the relevant jurisdiction.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.
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