Historical S&P 500 Industry Weights – [20+ Year History]
Updated 7/12/2023 If you’re benchmarking to the S&P 500, then it helps to know the context of your industry weighting compared to the index. It can help to explain your portfolio’s relative performance. It can also create a “heat check” to how your portfolio is balanced, and how it might react to an upcoming economic […]
What’s a Good Debt to Equity Ratio? The Ultimate Guide for Beginners
The debt to equity ratio is a great formula for investors to use as a rule of thumb for determining the riskiness of a stock, based on its balance sheet. That said, not all companies with a high debt to equity ratio are risky companies; not all companies with a low (or zero) debt to […]
What is Net Interest Margin and How Do I Calculate It?
“In the end, banking is a very good business unless you do dumb things.” – Warren Buffett Investing in banks remains the same as investing in other businesses. We need to understand the fundamentals and how they make money. Part of that understanding is the net interest margin or NIM. Part of how every bank […]
Average Operating (EBIT) Margin by Industry – 22 Years of Data [S&P 500]
Updated 4/21/2023 Operating margin is probably the most useful profitability ratio because it’s much less volatile than net margin but includes all operating expenses to run a business (which gross margin doesn’t). Obviously, we want to see increasing operating margins over time. But how’s an investor to know if a company’s general levels of operating […]
Average Gross Profit Margin by Industry – 22 Years of Data [S&P 500]
Updated 4/21/2023 Gross profit margin is one of the three main margin formulas in a company’s income statement, which measures a company’s efficiency in creating profitability. Gross profit margin, or “Gross Margin”, is basically how profitable a product or service is before you account for the operating costs, taxes, and interest payments to run the […]
The Importance of Non-Interest Income in the Banking Industry
“In the end, banking is a very good business unless you do dumb things. You get your money extraordinarily cheap, and you don’t have to do dumb things.” – Warren Buffett Warren Buffett, one of our greatest investors, understands and invests in banks. Part of our challenge in investing in banks orbits around understanding their […]
How the Piotroski Score Identifies Strong Businesses in the Stock Market
Updated 4/28/2023 One of the biggest challenges when determining whether or not to invest in a company is determining each company’s financial strength. Enter the Piotroski Score, and use the easy rating scale to help you learn a company’s strengths. Value investors love this rating scale as it gives you a good initial insight into […]
Publicly Traded Logistics Companies Report: Winter 2022 Results
Public financial data collected by investment newsletter provider Sather Research, LLC showed that 6 Publicly Traded Logistics Companies Grew Total Revenues Over 6% YOY in the October – December Quarter, According to Latest Earnings Releases. Of the publicly traded home builders who released earnings results in January/February, the following 6 companies grew revenues 6%+ YOY: Old Dominion Freight Line, Saia Inc, […]
What is Degree of Combined Leverage? Definition and Use
Combined leverage is a powerful tool to analyze how a company uses debt, its expected future performance, and how it can amplify increases in sales. This post covers how to calculate this ratio, how it is used, and what it means.
How to Calculate Net Interest Income with Examples
“In the end, banking is a very good business unless you do dumb things. You get your money extraordinarily cheap, and you don’t have to do dumb things. But periodically, banks do it, and they do it as a flock, like international loans in the 80s. You don’t have to be a rocket scientist when […]
