Long-term growth should be sustainable and consistent.
Look for sustained growth across business cycles.
A big pop in earnings one year followed by malaise for the next two does not paint a pretty picture. Long, consistent successful earnings track records get the A grades.
Beyond earnings, consistency is a desired feature for other parts of the earnings statement.
Consistency is highly prized in:
- sales and sales growth,
- profit margins and margin growth, and
- operating expense and expense trends.
The less consistency, the more difficult to predict the future five or ten years and beyond, and the less attractive a company looks to value investors.
No comments:
Post a Comment