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 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.

If this kind of company isn't your style, you like companies that generate revenue, and even earn profits, then you may well be interested in Centuria Capital Group (ASX:CNI). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Centuria Capital Group with the means to add long-term value to shareholders.

Check out our latest analysis for Centuria Capital Group

How Quickly Is Centuria Capital Group Increasing Earnings Per Share?

The market is a voting machine in the short term, but a weighing machine in the long term, so you'd expect share price to follow earnings per share (EPS) outcomes eventually. That makes EPS growth an attractive quality for any company. Shareholders will be happy to know that Centuria Capital Group's EPS has grown 30% each year, compound, over three years. As a general rule, we'd say that if a company can keep up that sort of growth, shareholders will be beaming.

It's often helpful to take a look at earnings before interest and tax (EBIT) margins, as well as revenue growth, to get another take on the quality of the company's growth. Centuria Capital Group's EBIT margins have actually improved by 4.6 percentage points in the last year, to reach 49%, but, on the flip side, revenue was down 12%. While not disastrous, these figures could be better.

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.

You don't drive with your eyes on the rear-view mirror, so you might be more interested in this free report showing analyst forecasts for Centuria Capital Group's future profits.

Are Centuria Capital Group 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, small purchases are not always indicative of conviction, and insiders don't always get it right.

Any way you look at it Centuria Capital Group shareholders can gain quiet confidence from the fact that insiders shelled out AU$549k to buy stock, over the last year. And when you consider that there was no insider selling, you can understand why shareholders might believe that there are brighter days ahead. It is also worth noting that it was Independent Non-Executive Chairman Kristie Brown who made the biggest single purchase, worth AU$453k, paying AU$1.82 per share.

Along with the insider buying, another encouraging sign for Centuria Capital Group is that insiders, as a group, have a considerable shareholding. With a whopping AU$131m worth of shares as a group, insiders have plenty riding on the company's success. Amounting to 8.7% of the outstanding shares, indicating that insiders are also significantly impacted by the decisions they make on the behalf of the business.

Should You Add Centuria Capital Group To Your Watchlist?

If you believe that share price follows earnings per share you should definitely be delving further into Centuria Capital Group's strong EPS growth. Not only that, but we can see that insiders both own a lot of, and are buying more shares in the company. These things considered, this is one stock worth watching. However, before you get too excited we've discovered 2 warning signs for Centuria Capital Group that you should be aware of.

Keen growth investors love to see insider activity. Thankfully, Centuria Capital Group isn't the only one. You can see a a curated list of Australian companies which have exhibited consistent growth accompanied by high insider ownership.

Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.