High Profit Margin Companies – Though over the last five years the stocks of companies with high profit margins have underperformed the stocks of companies with low profit margins, the scenario is poised to change, believes Barclays analysts. Jonathan Glionna and team said in their “U.S. Equity Strategy” report that they don’t expect the U.S. to enter a recession in the near term.
High Profit Margin Companies – Could profit margins be predicting a recession?
Glionna and team point out that after touching an all-time high in 2014, profit margins for the S&P 500 have dropped by 60bp in the last 12 months to 8.5%. They note that since 1973, profit margins have declined on six occasions:
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