There is a lot made of profit margins in this industry. In fact, the author "Joel Greenblatt" authored a book where his only conditions for stock research were to buy companies with high levels of return on assets as well as a low earnings yield.
For example, let's take Preformed Line Products (PLPC), the electrics parts company and see whether it satisfies Greenblatt's conditions. At present, Preformed Line Products' price to earnings ratio comes in at 12.5. This number certainly satisfies Greenblatt's earnings condition in that it is low and it is well behind the