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Zacks.com featured expert Kevin Matras highlights: Shoe Carnival, SP Plus, SkyWest, SYNNEX and Information Services Group

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For Immediate Release

Chicago, IL – March 11, 2019– Stocks in this week’s article include Shoe Carnival, Inc. (SCVL - Free Report) , SP Plus Corporation (SP - Free Report) , SkyWest, Inc. (SKYW - Free Report) , SYNNEX Corporation (SNX - Free Report) and Information Services Group, Inc. (III - Free Report) . Kevin Matras screens for companies showing their 'first' profit and explains why they are ones to watch.

Screen of the Week written by Kevin Matras of Zacks Investment Research:

Grab These 5 Stocks that Boast Substantial Net Profit Margin

Investors rely on net profit margin to pick stocks that ensure maximum returns from the portfolio. Net profit margin is the most effective way to measure a company’s profitability. A proper analysis of the same shows how well a company is run and the way it handles headwinds.

A higher net margin reflects a company’s efficiency in converting sales to actual profits.

Net Profit Margin= Net profit/Sales * 100.

In simple terms, net profit is the amount a company retains after deducting all costs, interest, depreciation, taxes and other expenses. In fact, net profit margin can turn out to be a potent point of reference to gauge the strength in a company operations and cost-control measures.

Also, higher net profit is essential for rewarding stakeholders. Further, strength in the metric not only attracts investors but also draws well-skilled employees that eventually add to the value of the business.

Moreover, a higher net profit margin compared to its peers lends the company a competitive edge.

Net Profit Margin= Net profit/Sales * 100

In simple terms, net profit is the amount a company retains after deducting all costs, interest, depreciation, taxes and other expenses. In fact, net profit margin can turn out to be a potent point of reference to gauge the strength of a company’s operations and cost-control measures.

Also, higher net profit is essential for rewarding stakeholders. Net margin helps investors judge the risk involved in an investment. Creditors also view it as crucial to determining a company’s ability to pay off debts.

Moreover, a higher net profit margin compared to its peers lends the company a competitive edge.

Pros and Cons

Net profit margin helps investors gain clarity on a company’s business model in terms of pricing policy, cost structure and manufacturing efficiency. Hence, a strong net profit margin is preferred by all classes of investors.

However, net profit margin as an investment criterion has its own share of pitfalls. The metric varies widely from industry to industry. While net income is a key metric for investment measurement in traditional industries, it is not that important for technology companies.

Moreover, the difference in accounting treatment of various items — especially non-cash expenses like depreciation and stock-based compensation — makes comparison a daunting task.

Further, for companies preferring to grow with debt instead of equity funding, higher interest expenses usually weigh on net profit. In such cases, the measure is rendered ineffective while analyzing a company’s performance.

For the rest of this Screen of the Week article please visit Zacks.com at:https://www.zacks.com/stock/news/358213/grab-these-6-stocks-that-boast-substantial-net-profit-margin

Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.

About Screen of the Week

Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine.  But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use.

Strong Stocks that Should Be in the News

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