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(04-11-2010, 04:59 PM)Musicwhiz Wrote: Hi Taka666,
Perhaps I wasn't clear enough, sorry. I meant that if you note such high ROE and gross/net margins for a company which is in a highly competitive industry, then you should question the integrity of the numbers. It's best to do a 10-year review to look at the consistency of the numbers before passing any judgement.
As for HLS, I do agree it has a strong Balance Sheet.
Haha MW now I get it. I was stunned for a moment when u said "Some companies which report sparkling ROE/ROA and net margins should immediately be suspect if they operate in a price-competitive, commodity-like industry". It made me think that all companies with high ROE and net margins must be operating in a commodity-based industry. I have now learnt to question the numbers if price-sensitive companies have high ROE and profit margins. I have seen this trend with S-chips. Do you know why is this so? Are they cooking their books?
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