The excitement of investing in a company that can reverse its fortunes is a big draw for some speculators, so even companies that have no revenue, no profit, and a record of falling short, can manage to find investors. But as Peter Lynch said in One Up On Wall Street, 'Long shots almost never pay off.' A loss-making company is yet to prove itself with profit, and eventually the inflow of external capital may dry up.

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 Hill & Smith (LON:HILS). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Hill & Smith with the means to add long-term value to shareholders.

Check out our latest analysis for Hill & Smith

Hill & Smith's Improving Profits

Hill & Smith 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. It's good to see that Hill & Smith's EPS has grown from UK￡0.81 to UK￡0.96 over twelve months. That's a 18% gain; respectable growth in the broader scheme of things.

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. EBIT margins for Hill & Smith remained fairly unchanged over the last year, however the company should be pleased to report its revenue growth for the period of 3.6% to UK￡832m. That's encouraging news for the company!

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.

Fortunately, we've got access to analyst forecasts of Hill & Smith's future profits. You can do your own forecasts without looking, or you can take a peek at what the professionals are predicting.

Are Hill & Smith Insiders Aligned With All Shareholders?

Insider interest in a company always sparks a bit of intrigue and many investors are on the lookout for companies where insiders are putting their money where their mouth is. Because often, the purchase of stock is a sign that the buyer views it as undervalued. However, small purchases are not always indicative of conviction, and insiders don't always get it right.