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 the reality is that when a company loses money each year, for long enough, its investors will usually take their share of those losses. A loss-making company is yet to prove itself with profit, and eventually the inflow of external capital may dry up.

In contrast to all that, many investors prefer to focus on companies like ISA Holdings (JSE:ISA), which has not only revenues, but also profits. While profit isn’t the sole metric that should be considered when investing, it’s worth recognising businesses that can consistently produce it.

Check out our latest analysis for ISA Holdings

If a company can keep growing earnings per share (EPS) long enough, its share price should eventually follow. So it makes sense that experienced investors pay close attention to company EPS when undertaking investment research. It certainly is nice to see that ISA Holdings has managed to grow EPS by 32% per year over three years. If the company can sustain that sort of growth, we’d expect shareholders to come away satisfied.

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. While we note ISA Holdings achieved similar EBIT margins to last year, revenue grew by a solid 33% to R101m. 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.

ISA Holdings isn’t a huge company, given its market capitalisation of R295m. That makes it extra important to check on its balance sheet strength.

Seeing insiders owning a large portion of the shares on issue is often a good sign. Their incentives will be aligned with the investors and there’s less of a probability in a sudden sell-off that would impact the share price. So those who are interested in ISA Holdings will be delighted to know that insiders have shown their belief, holding a large proportion of the company’s shares. In fact, they own 40% of the shares, making insiders a very influential shareholder group. Shareholders and speculators should be reassured by this kind of alignment, as it suggests the business will be run for the benefit of shareholders. Valued at only R295m ISA Holdings is really small for a listed company. So despite a large proportional holding, insiders only have R118m worth of stock. That might not be a huge sum but it should be enough to keep insiders motivated!