March 2011 Webinar: What to Look for in an Annual Report
Profit Margin: No Invitation to The Ball
Travel Lightly with PortableApps
San Diego, California, May 13-15, 2011
Marriott Mission Valley Hotel
Crystal Balls Don’t Work. Education Does.
"InvestEd is the best investing conference I have attended. Excellent!"
- Debra Clark, Salisbury, Maryland
Join like-minded investors in San Diego, May 13-15, 2011, for the fifth annual InvestEd. The InvestEd conference is jam packed with sessions that meet the needs of both novice and advanced investors.
Each year, InvestEd lines up an elite group of instructors such as Mary Ann Davis, Saul Seinberg, Bob Adams, Brian Altschul, Don Cassidy, John Diercks, and many more. This year, InvestEd is pleased to offer several sessions for educational instruction you have not seen elsewhere. These sessions include:
- Option Selling Strategies taught by Mary Ann Davis
- Deflation or No-Flation: Investing Under the New Normal taught by Don Cassidy
- Lighting Your Investment Path with Candlesticks taught by Saul Seinberg
- Sell Indicators in Toolkit 6 taught by Doug Gerlach
- The Whys of a Stock Study taught by Brian Altschul
- Getting To Know Exchange-Traded Funds taught by John Diercks
- Juicing Your Portfolio with Dividends taught by Pam Wilkes
And Many More!
View a full listing of sessions at InvestEd, including newbie through advanced sessions.
Be certain to register today! For only $409 you will receive invaluable investor education from talented, renowned investor education specialists!
InvestEd Inc. Free Webinar
What to Look for in an Annual Report
Sunday, March 27, 2011, 9 PM -10:15 PM ET/6 PM -7:15 PM PT
Instructor: John Diercks
Topics: Annual Reports, Financial Statements, Management’s Assessment, 10K Reports
Free Webinar Registration https://www1.gotomeeting.com/register/886292793
Investors seldom use annual reports for their maximum value. Learn how to find key information with little effort in these often boring reports. Investigate the major sections of an annual report, note important items to isolate in each section, and identify the importance for stock studies.
John Diercks is an InvestEd instructor. The sessions he will present at InvestEd 2011 are listed and described on the InvestEd website in Educational Sessions under General Sessions.
Profit Margin: No Invitation to The Ball
By Brian Altschul
Poor deserted profit margin is not invited to The Ball on the front page of the Toolkit stock study form. Its step-mother (sales) and step-sisters (net profit and earnings) are invited, in spite of the fact that profit margins could be the most important indicator of a company’s success! Why give profit margin second-class citizen status?
What is Profit Margin?
Pre-tax profit margin is the ratio on the back of the stock study form in section 2A. It is a fairly simple computation:
pre-tax profit margin = net profit before taxes divided by sales x 100
The result is the percentage of profit a company makes for each dollar of sales.
What is a Good Profit Margin?
Unfortunately, no rule or definition of a good profit margin exists. However, you can make comparisons based on the industry and the company's year-over-year trend.
For example, drug manufacturers may have a profit margin as high as 40% (industry average is around 20%), while supermarkets commonly have profit margins as low as 2%. When doing your stock study, look for margins that are consistent or increasing. This shows that management continues to control costs or to introduce productivity improvements.
Why Is the Profit Margin So Important?
Earnings (earnings per share or EPS) are computed by subtracting expenses and taxes from sales and dividing the result by the number of shares outstanding.
earnings per share =
(sales minus (expenses plus taxes)) divided by number of shares outstanding
Expenses are computed in a stock study as the complement of profit margin. Taxes are computed based on a company's profits and are based only indirectly on sales. Therefore, the biggest contributor to earnings is profit margin.
A 1% increase in profit margin results in a 1% gain in earnings, indicating a direct correlation between these two items. If a company can figure out a way to increase profit margins, it will increase earnings.
Companies try hard to show earnings per share increases every quarter. Only three ways are available for that to happen: increase earnings, decrease shares, or do both. Companies must increase their profit margin in order to continue to grow their earnings.
Wearing the Glass Slipper
Always take a look at profit margin in section 2A of the stock study. Checking this often will tell you more about the company's ability to sustain its growth than any other statistic on the form. Next time you do a stock study, be sure to invite profit margin to The Ball.
Brian Altschul is an InvestEd instructor and secretary of InvestEd Inc. The sessions he will present are listed in Educational Sessions under General Sessions and Leadership Training.
Travel Lightly with PortableApps
By Joe Craig
Here is something for those of you who like to travel light - without your computer. Take a look at PortableApps. With PortableApps, you can carry your favorite computer programs with you, along with all of your bookmarks, settings, email, and more. You can use them on any Windows computer and, because the program data is stored on your flash drive, you can do this without leaving any personal data behind.
PortableApps installs on a flash drive, your iPod, or your portable hard drive. You simply plug it into a convenient computer, do what you need to do, and then go about your other business. When you unplug the device, your personal data goes with you. It doesn't stay on the computer you were using.
Did I mention that PortableApps is free? You can get a copy and learn more at http://portableapps.com.
The one drawback to using PortableApps is that you must use open source software. So, while you can't take Microsoft Office with you because of licensing restrictions, you can take OpenOffice. Portable apps for Firefox, Chrome, PDF file readers, Filezilla (my favorite FTP application), media players, password safes, games, and lots more are available.
You also can store copies of your documents on your flash drive along with your portable apps. Or, you can store your documents online using file sharing services like Dropbox or Google Documents.
You can even use an online version of Office to, as Microsoft says, "view and edit Office documents from virtually anywhere you're online." Visit Office Live Workspace for more details and to create a free account.
With a little planning, you can take your computer applications with you, but without taking your computer along, too. Use PortableApps in hotels or other business centers, or on the computer of a friend or coworker, and do so with the knowledge that your data stays with you.
Related Link: Guide to Using Portable Apps
Joe Craig is a vice-president of InvestEd Incorporated and an InvestEd instructor. The sessions he will present are listed in Educational Sessions under General Sessions and Leadership Training.
Questions? Contact InvestEd
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InvestEd Inc., a 501(c)(3) non-profit corporation, produces the InvestEd conference.