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 the reality is that when a company loses money each year, for long enough, its investors will usually take their share of those losses. While a well funded company may sustain losses for years, it will need to generate a profit eventually, or else investors will move on and the company will wither away.

In contrast to all that, many investors prefer to focus on companies like Strategic Education (NASDAQ:STRA), 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 Strategic Education with the means to add long-term value to shareholders.

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How Quickly Is Strategic Education Increasing Earnings Per Share?

Generally, companies experiencing growth in earnings per share (EPS) should see similar trends in share price. That means EPS growth is considered a real positive by most successful long-term investors. Shareholders will be happy to know that Strategic Education's EPS has grown 26% each year, compound, over three years. If growth like this continues on into the future, then shareholders will have plenty to smile about.

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 good news is that Strategic Education is growing revenues, and EBIT margins improved by 2.9 percentage points to 13%, over the last year. That's great to see, on both counts.

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.

See our latest analysis for Strategic Education

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 Strategic Education's future profits .

Are Strategic Education Insiders Aligned With All Shareholders?

Investors are always searching for a vote of confidence in the companies they hold and insider buying is one of the key indicators for optimism on the market. That's because insider buying often indicates that those closest to the company have confidence that the share price will perform well. Of course, we can never be sure what insiders are thinking, we can only judge their actions.

The US$128k worth of shares that insiders sold during the last 12 months pales in comparison to the US$2.2m they spent on acquiring shares in the company. This adds to the interest in Strategic Education because it suggests that those who understand the company best, are optimistic. We also note that it was the Chairman, Robert Silberman, who made the biggest single acquisition, paying US$850k for shares at about US$80.70 each.

The good news, alongside the insider buying, for Strategic Education bulls is that insiders (collectively) have a meaningful investment in the stock. Holding US$68m worth of stock in the company is no laughing matter and insiders will be committed in delivering the best outcomes for shareholders. This should keep them focused on creating long term value for shareholders.

Should You Add Strategic Education To Your Watchlist?

If you believe that share price follows earnings per share you should definitely be delving further into Strategic Education's strong EPS growth. Furthermore, company insiders have been adding to their significant stake in the company. Astute investors will want to keep this stock on watch. Now, you could try to make up your mind on Strategic Education by focusing on just these factors, or you could also consider how its price-to-earnings ratio compares to other companies in its industry .

There are plenty of other companies that have insiders buying up shares. So if you like the sound of Strategic Education, you'll probably love this curated collection of companies in the US that have an attractive valuation alongside insider buying in the last three months.

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.