Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Paul Senior who wrote (47061)	3/15/2012 11:06:45 PM
From: Robohogs	Read Replies (1) \| Respond to of 78705

Many grocers have gone bk. But that is also wrong capital structure allowing the miss to kill the company. Jon

To: Paul Senior who wrote (47061)	3/16/2012 10:40:58 PM
From: grahamcracker	Read Replies (1) \| Respond to of 78705

<< "At 1% margins, a slight miss leads to losses.">> <<That sometimes seems to be the reason that people won't buy such stocks. In my experience, I've found that that concern about low absolute margins to be almost unfounded. First, companies can often go years or decades doing okay with low margins. Especially if they have a lot of sales per share (low p/sales ratio). Grocery chains, for example. >> Paul - I agree. The grocery business is a high volume, low margin business eternally, never mind decades. Looking at profit margin misses the point. Look at ROA and ROE, not profit margins for this type of business. Sure, you won't find hit-it-out-of-the-park Microsoft numbers (for which you'll typically pay through the nose), but you will often find them sufficient. I find boring is good when looking for values. [sorry to barge in. I saw the name of this board - my alias should explain my interest].