Zacks.com featured expert Kevin Matras highlights: Extra Space Storage Inc.,
HFF, Inc., Lannett Company, Inc., Moody's Corp. and W.R. Berkley Corp.
CHICAGO, April 18, 2013
CHICAGO, April 18, 2013 /PRNewswire/ --Stocks in this week's article include:
Extra Space Storage Inc. (NYSE: EXR), HFF, Inc. (NYSE: HF), Lannett Company,
Inc. (AMEX: LCI), Moody's Corp. (NYSE: MCO) and W.R. Berkley Corp. (NYSE:
WRB). Kevin Matras looks at the powerful combination of Sales Growth and
Increasing Profit Margins.
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. Without sales,
there really wouldn't be anything else to analyze. And Sales Growth numbers
show you how that company is growing.
However, just because sales are increasing, 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 continue to look at their sales numbers. And of course, look at their
earnings too. But take a look at their profit margins as well. Are they going
up or down? In other words, are they making more money on each dollar of sales
they make, or less? This is important stuff to know, and can make a huge
difference in your portfolio's bottom line.
Parameters for this week's screen are...
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