Philip Fisher, founder of the growth investing school of thought, was aware of the importance of how a company’s management handles its financial affairs; only when this is done well and accurately is management in a strong position.
Those companies with above-average financial talent have several significant advantages:
Difficult to discover
It’s difficult for us investors to uncover inefficiency in these areas. As outsiders we cannot expect to obtain detailed figures, but by talking to customers, suppliers, employees etc. we can start to build a picture of competence over time.
Consistence in profit margins and savings
Fisher looked for companies with a consistent history of high profit margins, as these are likely (but not certain) to give an indication of future performance. Some companies have a high degree of pricing power by which they are able to maintain their profit margin.
At the same time, it is just a....To read more subscribe to my premium newsletter Deep Value Shares – click here http://newsletters.advfn.com/deepvalueshares/subscribe-1
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