Like a puppy chasing its tail, some new investors often chase 'the next big thing', even if that means buying 'story stocks' without revenue, let alone profit. 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 APN Convenience Retail REIT (ASX:AQR). While that doesn't make the shares worth buying at any price, you can't deny that successful capitalism requires profit, eventually. 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.

Check out our latest analysis for APN Convenience Retail REIT

APN Convenience Retail REIT's Improving Profits

Over the last three years, APN Convenience Retail REIT has grown earnings per share (EPS) like young bamboo after rain; fast, and from a low base. So I don't think the percent growth rate is particularly meaningful. As a result, I'll zoom in on growth over the last year, instead. APN Convenience Retail REIT boosted its trailing twelve month EPS from AU$0.20 to AU$0.23, in the last year. I doubt many would complain about that 14% gain.

I like to see top-line growth as an indication that growth is sustainable, and I look for a high earnings before interest and taxation (EBIT) margin to point to a competitive moat (though some companies with low margins also have moats). While we note APN Convenience Retail REIT's EBIT margins were flat over the last year, revenue grew by a solid 15% to AU$37m. That's progress.

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.

The trick, as an investor, is to find companies that are going to perform well in the future, not just in the past. To that end, right now and today, you can check our visualization of consensus analyst forecasts for future APN Convenience Retail REIT EPS 100% free.

Are APN Convenience Retail REIT Insiders Aligned With All Shareholders?

Like that fresh smell in the air when the rains are coming, insider buying fills me with optimistic anticipation. That's because insider buying often indicates that those closest to the company have confidence that the share price will perform well. Of course, we can never be sure what insiders are thinking, we can only judge their actions.

Not only did APN Convenience Retail REIT insiders refrain from selling stock during the year, but they also spent AU$140k buying it. That's nice to see, because it suggests insiders are optimistic. We also note that it was the Independent Director of APN Funds Management Limited, Howard Brenchley, who made the biggest single acquisition, paying AU$90k for shares at about AU$3.61 each.

On top of the insider buying, it's good to see that APN Convenience Retail REIT insiders have a valuable investment in the business. Indeed, they hold AU$19m worth of its stock. That shows significant buy-in, and may indicate conviction in the business strategy. Despite being just 4.1% of the company, the value of that investment is enough to show insiders have plenty riding on the venture.

Is APN Convenience Retail REIT Worth Keeping An Eye On?

One positive for APN Convenience Retail REIT is that it is growing EPS. That's nice to see. Better yet, insiders are significant shareholders, and have been buying more shares. To me, that all makes it well worth a spot on your watchlist, as well as continuing research. Still, you should learn about the 3 warning signs we've spotted with APN Convenience Retail REIT .

As a growth investor I do like to see insider buying. But APN Convenience Retail REIT isn't the only one. You can see a a free list of them here.

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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