Zacks.com Featured Highlights: Arkema, Nutrisystem, Gibraltar Industries, Broadcom And Willdan

For Immediate Release

Chicago, IL – December 12, 2017 - Stocks in this week’s article Arkema SA (OTC:ARKAY) , Nutrisystem Inc. (NASDAQ:NTRI) , Gibraltar Industries Inc. (NASDAQ:ROCK) , Broadcom Limited (NASDAQ:AVGO) and Willdan Group Inc. (NASDAQ:WLDN) .

5 Top Stocks with Powerful New Profit Margin

Net profit margin is the most effective way to measure a company’s profits. A proper analysis of the same reveals how well a company is run and the headwinds confronting it.

A higher net margin reflects the company’s efficiency at converting sales into actual profits.

Net Profit Margin = Net profit /Sales * 100.

In simple terms, net profit is the amount a company retains after deducting all costs, interest, depreciation, taxes and other expenses. In fact, net profit margin can turn out to be a potent point of reference to gauge the strength in a company operations and cost-control measures.

Also, higher net profit is essential for rewarding stakeholders. Further, strength in the metric not only attracts investors but also draws well-skilled employees that eventually add to the value of the business.

Moreover, a higher net profit margin as compared to peers lends a company competitive edge.

Pros and Cons

Net profit margin helps investors gain clarity on a company’s business model in terms of pricing policy, cost structure and manufacturing efficiency. Hence, a strong net profit margin is preferred by all classes of investors.

However, net profit margin as an investment criterion has its own share of pitfalls. The metric varies widely from industry to industry. While net income is a key metric for investment measurement in traditional industries, it is not that important for technology companies.

Moreover, the difference in accounting treatment of various items — especially non-cash expenses like depreciation and stock-based compensation — makes comparison a daunting task.

Further, for companies preferring to grow with debt instead of equity funding, higher interest expenses usually weigh on the net profit. In such cases, the measure is rendered ineffective to analyze a company’s performance.

For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/285510/5-top-stocks-with-powerful-net-profit-margin

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