Edge ResourcesLSE:EDG Gross Margin % is 7.69% as of Dec. 2015, which is 89% below its 10-year median of 70.84. The stock has 5 warning signs investors should review.
Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.
Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %
1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key
Edge Resources had a gross margin of 7.69% for the quarter that ended in Dec. 2015 => No sustainable competitive advantage
Be Aware
If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.
Edge Resources Gross Margin % Related Terms
Edge Resources Gross Margin % Historical Data
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The historical data trend for Edge Resources's Gross Margin % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
LSE:EDG vs GDPMQ, OOIL, ALOD: Gross Margin % Comparison
For the Oil & Gas E&P subindustry, Edge Resources's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Edge Resources Gross Margin % vs Oil & Gas Industry
For the Oil & Gas industry and Energy sector, Edge Resources's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Edge Resources's Gross Margin % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.
Edge Resources (LSE:EDG) has a Gross Margin % of 7.69% as of Dec. 2015. Gross margin is the ratio of total gross profit to net sales. View historical data on Edge Resources and its competitors. This is 89% below median its historical median of 70.84. Over the past decade, Edge Resources' Gross Margin % has ranged from 12.35 to 100.00.
Is Edge Resources' Gross Margin % too high?
Edge Resources' current Gross Margin % of 7.69% is 89% below median its 10-year median of 70.84. Over the past 10 years, this metric has ranged from a low of 12.35 to a high of 100.00. The Oil & Gas industry median Gross Margin % is 25.62. Edge Resources' value of 7.69% is 70% below this industry median.
How does Edge Resources' Gross Margin % compare to GDPMQ and OOIL?
Edge Resources' Gross Margin % of 7.69% can be compared against companies in the Oil & Gas industry. The industry median Gross Margin % is 25.62. Edge Resources' value of 7.69% is 70% below this benchmark. Historically, Edge Resources' own Gross Margin % has ranged from 12.35 to 100.00 over the past decade. While the company's 10-year median is 70.84 vs. the industry median of 25.62, Edge Resources has consistently been below the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Gross Margin % for an Oil & Gas company?
The median Gross Margin % among Oil & Gas companies is 25.62, based on 872 companies in the industry. Companies in the top quartile (top 25%) have a Gross Margin % significantly above this median, while those in the bottom quartile fall well below. However, Gross Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Edge Resources's current Gross Margin % of 7.69% is 70% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Gross Margin % mean?
A high Gross Margin % can signal that a stock is expensive relative to its fundamentals. Gross margin is the ratio of total gross profit to net sales. View historical data on Edge Resources and its competitors. For the Oil & Gas industry, the median Gross Margin % is 25.62 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Edge Resources's current Gross Margin % is 7.69%, which is 89% below median its own 10-year median of 70.84. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Edge Resources stock overvalued right now?
Edge Resources (LSE:EDG) has a current Gross Margin % of 7.69%. The current Gross Margin % is 7.69%, which is 89% below median its 10-year median of 70.84 and 70% below the Oil & Gas industry median of 25.62. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Gross Margin % calculated?
Gross Margin % is calculated from a company's financial statements. For Edge Resources (LSE:EDG), the current Gross Margin % is 7.69% as of Dec. 2015. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Edge Resources Inc is engaged in the acquisition, exploration, development, and production of oil and natural gas in Alberta and Saskatchewan, Canada. Its projects include Grand Forks, Willesden Green North, and Primate.
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