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27 April 2019
By Maynard Paton
For this market trawl I employed two ratios favoured by ‘quality’ investors.
The first measure was operating margin, which represents the percentage of sales converted into profit.
The second measure was return on equity, or ROE, which is calculated by dividing earnings by the shareholder equity used to produce those earnings.
I used SharePad to identify a suitable company, and selected Victrex — a £2 billion specialist manufacturer of high-performance polymers — for further investigation.
Victrex offered a wonderful 39% operating margin and a robust 23% ROE.