It's only natural that many investors, especially those who are new to the game, prefer to buy shares in 'sexy' stocks with a good story, even if those businesses lose money. Unfortunately, high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson.

So if you're like me, you might be more interested in profitable, growing companies, like II-VI (NASDAQ:IIVI). Even if the shares are fully valued today, most capitalists would recognize its profits as the demonstration of steady value generation. While a well funded company may sustain losses for years, unless its owners have an endless appetite for subsidizing the customer, it will need to generate a profit eventually, or else breathe its last breath.

See our latest analysis for II-VI

How Quickly Is II-VI Increasing Earnings Per Share?

The market is a voting machine in the short term, but a weighing machine in the long term, so share price follows earnings per share (EPS) eventually. It's no surprise, then, that I like to invest in companies with EPS growth. Over the last three years, II-VI has grown EPS by 9.4% per year. That's a good rate of growth, if it can be sustained.

I like to see top-line growth as an indication that growth is sustainable, and I look for a high earnings before interest and taxation (EBIT) margin to point to a competitive moat (though some companies with low margins also have moats). II-VI maintained stable EBIT margins over the last year, all while growing revenue 11% to US$3.2b. That's a real positive.

In the chart below, you can see how the company has grown earnings, and revenue, over time. Click on the chart to see the exact numbers.

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

Are II-VI Insiders Aligned With All Shareholders?

We would not expect to see insiders owning a large percentage of a US$7.2b company like II-VI. But we do take comfort from the fact that they are investors in the company. Given insiders own a small fortune of shares, currently valued at US$98m, they have plenty of motivation to push the business to succeed. This should keep them focused on creating long term value for shareholders.

Is II-VI Worth Keeping An Eye On?

One positive for II-VI is that it is growing EPS. That's nice to see. If that's not enough on its own, there is also the rather notable levels of insider ownership. The combination sparks joy for me, so I'd consider keeping the company on a watchlist. We should say that we've discovered 1 warning sign for II-VI that you should be aware of before investing here.