Investors are often guided by the idea of discovering 'the next big thing', even if that means buying 'story stocks' without any revenue, let alone profit. 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.

In contrast to all that, many investors prefer to focus on companies like Iofina (LON:IOF), which has not only revenues, but also profits. Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Iofina with the means to add long-term value to shareholders.

Check out our latest analysis for Iofina

Iofina's Improving Profits

Iofina has undergone a massive growth in earnings per share over the last three years. So much so that this three year growth rate wouldn't be a fair assessment of the company's future. Thus, it makes sense to focus on more recent growth rates, instead. Iofina boosted its trailing twelve month EPS from US$0.04 to US$0.05, in the last year. This amounts to a 25% gain; a figure that shareholders will be pleased to see.

Top-line growth is a great indicator that growth is sustainable, and combined with a high earnings before interest and taxation (EBIT) margin, it's a great way for a company to maintain a competitive advantage in the market. The music to the ears of Iofina shareholders is that EBIT margins have grown from 14% to 25% in the last 12 months and revenues are on an upwards trend as well. Both of which are great metrics to check off for potential growth.

You can take a look at the company's revenue and earnings growth trend, in the chart below. Click on the chart to see the exact numbers.

Iofina isn't a huge company, given its market capitalisation of UK￡47m. That makes it extra important to check on its balance sheet strength.

Are Iofina Insiders Aligned With All Shareholders?

It's a necessity that company leaders act in the best interest of shareholders and so insider investment always comes as a reassurance to the market. So it is good to see that Iofina insiders have a significant amount of capital invested in the stock. Indeed, they hold US$13m worth of its stock. This considerable investment should help drive long-term value in the business. As a percentage, this totals to 27% of the shares on issue for the business, an appreciable amount considering the market cap.