High and Low Margin (when it matters)Positive Margin numbers are always good to see but how high does Margin need to be for each company ??
Well that Depends...
Different companies have different business models with different ways to bring value to their operations and therefore value to their investors.
Smaller / speciality Companies may have very high margin compared to others because their customers are willing to pay extra for speciality products. This can be seen in everything from Speciality Food Producers to Clothing Companies. The more "special" the product the more "extra" you pay and therefore the company makes higher margin PER SALE.
Larger / Mass Production companies can be hughly successful with much lower margin numbers because the sell standardized products but in VERY HIGH VOLUME. Again this can be seen in companies like those noted above but their product offerings are "typical" without the bells and whistles of the Speciality shops.
Do you want a McDonald's Burger or a Special Grasshopper Burger ?
I would tend to bet the Grasshopper Burger will cost you an arm and a leg (and has high Margin) however a standard hamburger is much cheaper with a much lower Margin per burger.
Which would you invest in ?