Zacks.com featured expert Kevin Matras highlights: American Vanguard Corp.,
B&G Foods, Inc., Hertz Global Holdings, Inc., Pinnacle Financial Partners,
Inc. and Tyler Technologies, Inc.
CHICAGO, Jan. 30, 2013
CHICAGO, Jan. 30, 2013 /PRNewswire/ --Stocks in this week's article include:
American Vanguard Corp. (NYSE: AVD), B&G Foods, Inc. (NYSE: BGS), Hertz Global
Holdings, Inc. (NYSE: HTZ), Pinnacle Financial Partners, Inc. (NASDAQ: PNFP)
and Tyler Technologies, Inc. (NYSE: TYL). Kevin Matras looks at Sales Growth
and Increasing Profit Margins, a powerful combination for big returns.
Screen of the Week written by Kevin Matras of Zacks Investment Research:
This week I want to focus on Sales Growth and Profit Margins. While everybody
understands sales, margins might bring up a few question marks.
So let's start at the beginning: first and foremost, sales are THE most
important thing to a company. Everything else stems from that. And Sales
Growth numbers show you how that company is growing.
However, increasing sales doesn't always mean that profits are increasing too.
Sales at the expense of profits does not work. So paying attention to Profit
Margins is the next thing we're going to want to look at.
Margin is simply a ratio and the calculation is: Net Income divided by Sales.
So if a company's margin is 15% for instance, that means its net income is 15
cents for every $1 of sales it makes. But if a company's expenses are growing
faster than sales, this will reduce its margins. In general, a company with
increasing margins is becoming more profitable and is better managed, i.e.,
its costs are under control.
So this earnings season, dig deeper into the numbers. Yes, look at their
sales. And of course, look at their earnings. But take a look at their profit
margins as well. Are they going up or down? In other words, are they making
more on each dollar of sales they make, or less? This is important stuff to
know, and could make the difference between investors buying a company's
earnings announcement, or selling it.
Parameters for this week's screen are...
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