Sentences with phrase «margin reversion to the mean»

-LSB-...] Beware of profit margin REVERSION TO THE MEAN!

Not exact matches

His thesis was that the reversion to the mean would see both stocks and profit margins fall from such great heights.

A company with a high return on net assets ratio, profit margin, or asset turnover relative to its industry median tends to have greater mean reversion in these measures.

I remember seeing a study that showed mean reversion in businesses; high margin businesses go back to low - to - average margin, high return on cap goes to normal, high earnings growth peters out to low growth... negative to low growth goes up to average or high growth etc..

But it would require a much healthier economy which would cause financial EBITDA margins to go up, thus offsetting the mean reversion somewhat.

I've posted here regularly about the implications of mean reversion in elevated profit margins (see, for example, The Temptation To Abandon Proven Models In Speculative and Fearful Markets: Why This Time Isn't Different, What Record Corporate Profit Margins Imply For Future Profitability and The Stock Market, Warren Buffett, Jeremy Grantham, and John Hussman on Profit, GDP and Competmargins (see, for example, The Temptation To Abandon Proven Models In Speculative and Fearful Markets: Why This Time Isn't Different, What Record Corporate Profit Margins Imply For Future Profitability and The Stock Market, Warren Buffett, Jeremy Grantham, and John Hussman on Profit, GDP and CompetMargins Imply For Future Profitability and The Stock Market, Warren Buffett, Jeremy Grantham, and John Hussman on Profit, GDP and Competition).

If you normalise the fuel margins the implied multiple can start to look less attractive, and to the extent the market does not expect mean reversion in terms of fuel margins this could lead to a nasty surprise.