High level decisions on buy or sell for a stock should be driven by
1. The margin that the company makes. i.e. Out of $1 that the company sells how much does the company taken home.
- Here we see ADOBE makes a margin of 87% on Gross Level and about 28% on Net level This means that out of $1 that it makes $0.28 is being pocketed as profits.
2. The growth rates of the company on revenue, net income, EPS and Dividend. i.e. If it sold $1 last year how much more did it sell this year.
- Here we see ADOBE grew at an astronomous rate of 23% in the revenue and the net profit figures grew by 46%.
3. The efficiency ratios of the company on Equity and Assets. i.e. How well is the company able to sweat each $1 that it puts to work in the company.
- Here we see ADOBE makes a Return on Assets of 27% and Return of Equity of 16% which is pretty good.
Here we see that ADOBE scores evenly on the parameters that we have selected when compared to our reasonable barriers that we have kept. With the high growth rates and high operating margins we decide to INVEST in the company.
GOLD STANDARD : This is one of the no-debate stocks that are a must have in ones portfolio.
All these ratios can be found in the attached excel sheets and are based on the EDGAR report submitted by ADOBE to the SEC. All the data on the above analysis can be found at the link below