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 are always racing against time to reach financial sustainability, so investors in these companies may be taking on more risk than they should.

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 Dundee Precious Metals (TSE:DPM). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Dundee Precious Metals with the means to add long-term value to shareholders.

View our latest analysis for Dundee Precious Metals

How Fast Is Dundee Precious Metals Growing Its Earnings Per Share?

Even when EPS earnings per share (EPS) growth is unexceptional, company value can be created if this rate is sustained each year. So it's easy to see why many investors focus in on EPS growth. To the delight of shareholders, Dundee Precious Metals' EPS soared from US$0.78 to US$1.11, over the last year. That's a impressive gain of 42%.

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. Dundee Precious Metals maintained stable EBIT margins over the last year, all while growing revenue 34% to US$542m. That's a real positive.

The chart below shows how the company's bottom and top lines have progressed over time. To see the actual numbers, click on the chart.

While we live in the present moment, there's little doubt that the future matters most in the investment decision process. So why not check this interactive chart depicting future EPS estimates, for Dundee Precious Metals?

Are Dundee Precious Metals 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. That's because insider buying often indicates that those closest to the company have confidence that the share price will perform well. However, insiders are sometimes wrong, and we don't know the exact thinking behind their acquisitions.

Shareholders in Dundee Precious Metals will be more than happy to see insiders committing themselves to the company, spending US$420k on shares in just twelve months. When you contrast that with the complete lack of sales, it's easy for shareholders to be brimming with joyful expectancy. Zooming in, we can see that the biggest insider purchase was by Executive VP & Chief Financial Officer Navindra Dyal for CA$161k worth of shares, at about CA$10.70 per share.