For beginners, it can seem like a good idea (and an exciting prospect) to buy a company that tells a good story to investors, even if it currently lacks a track record of revenue and profit. Sometimes these stories can cloud the minds of investors, leading them to invest with their emotions rather than on the merit of good company fundamentals. 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 Taylor Devices (NASDAQ:TAYD), 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 Taylor Devices with the means to add long-term value to shareholders.

View our latest analysis for Taylor Devices

How Fast Is Taylor Devices Growing Its Earnings Per Share?

Taylor Devices 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. Taylor Devices' EPS shot up from US$2.15 to US$2.84; a result that's bound to keep shareholders happy. That's a impressive gain of 32%.

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. Taylor Devices maintained stable EBIT margins over the last year, all while growing revenue 8.8% to US$44m. That's a real positive.

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.

Since Taylor Devices is no giant, with a market capitalisation of US$104m, you should definitely check its cash and debt before getting too excited about its prospects.

Are Taylor Devices 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. This view is based on the possibility that stock purchases signal bullishness on behalf of the buyer. However, insiders are sometimes wrong, and we don't know the exact thinking behind their acquisitions.

It's nice to see that there have been no reports of any insiders selling shares in Taylor Devices in the previous 12 months. So it's definitely nice that CEO & Director Timothy Sopko bought US$33k worth of shares at an average price of around US$33.25. Decent buying like this could be a sign for shareholders here; management sees the company as undervalued.

Should You Add Taylor Devices To Your Watchlist?

For growth investors, Taylor Devices' raw rate of earnings growth is a beacon in the night. Growth in EPS isn't the only striking feature with company insiders adding to their holdings being another noteworthy vote of confidence for the company. In essence, your time will not be wasted checking out Taylor Devices in more detail. However, before you get too excited we've discovered 1 warning sign for Taylor Devices that you should be aware of.

Keen growth investors love to see insider activity. Thankfully, Taylor Devices isn't the only one. You can see a a curated list of 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.