It's common for many investors, especially those who are inexperienced, to buy shares in companies with a good story even if these companies are loss-making. But the reality is that when a company loses money each year, for long enough, its investors will usually take their share of those losses. 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 Manx Financial Group (LON:MFX). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Manx Financial Group with the means to add long-term value to shareholders.

Check out our latest analysis for Manx Financial Group

How Quickly Is Manx Financial Group Increasing Earnings Per Share?

If you believe that markets are even vaguely efficient, then over the long term you'd expect a company's share price to follow its earnings per share (EPS) outcomes. So it makes sense that experienced investors pay close attention to company EPS when undertaking investment research. Manx Financial Group's shareholders have have plenty to be happy about as their annual EPS growth for the last 3 years was 40%. While that sort of growth rate isn't sustainable for long, it certainly catches the eye of prospective investors.

Careful consideration of revenue growth and earnings before interest and taxation (EBIT) margins can help inform a view on the sustainability of the recent profit growth. Not all of Manx Financial Group's revenue this year is revenue from operations, so keep in mind the revenue and margin numbers used in this article might not be the best representation of the underlying business. EBIT margins for Manx Financial Group remained fairly unchanged over the last year, however the company should be pleased to report its revenue growth for the period of 35% to UK￡34m. That's progress.

In the chart below, you can see how the company has grown earnings and revenue, over time. To see the actual numbers, click on the chart.

Since Manx Financial Group is no giant, with a market capitalisation of UK￡19m, you should definitely check its cash and debt before getting too excited about its prospects.

Are Manx Financial Group Insiders Aligned With All Shareholders?

Theory would suggest that it's an encouraging sign to see high insider ownership of a company, since it ties company performance directly to the financial success of its management. So we're pleased to report that Manx Financial Group insiders own a meaningful share of the business. Owning 35% of the company, insiders have plenty riding on the performance of the the share price. This should be a welcoming sign for investors because it suggests that the people making the decisions are also impacted by their choices. Of course, Manx Financial Group is a very small company, with a market cap of only UK￡19m. So this large proportion of shares owned by insiders only amounts to UK￡6.8m. That's not a huge stake in absolute terms, but it should help keep insiders aligned with other shareholders.