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I was reading the following phrase in an article on the street about Petrochina.
"TheStreet Ratings rates PetroChina as a buy. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, good cash flow from operations, solid stock price performance, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company shows low profit margins."
How does strong operational revenue and reasonable financial cost translate into low profit margin? Where do the money this company makes go to? Pay roll? Bribery? Your explanation is much appreciated.
You know what profit margin is, correct? You can have high revenues and growth and still have a low profit margin, just look at Amazon. The financial statements are public information, so just browse through them.
I was reading the following phrase in an article on the street about Petrochina.
"TheStreet Ratings rates PetroChina as a buy. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, good cash flow from operations, solid stock price performance, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company shows low profit margins."
How does strong operational revenue and reasonable financial cost translate into low profit margin? Where do the money this company makes go to? Pay roll? Bribery? Your explanation is much appreciated.
It may be considered a buy because even though they have a low profit margin they are doing well with their investments.
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