Avanta Serviced Office Group (LSE:ASOA) Operating Margin % Explanation
Just like Gross Margin %, it is important to see a company maintains its operating margin over time. Among the same industry, a company with higher operating margin is more efficient in its operation. It is also more stable during industry slowdown or recessions. Peter Lynch prefers those with higher margins than those with lower margins.
Be Aware
Operating Margin % can be manipulated by adjusting the rate of depreciation, depletion and amortization (DDA).
If a company is facing competition, its Operating Margin % may decline. Often the Operating Margin % declines well before the company's Revenue or even profit decline. Therefore, Operating Margin % is a very important indicator of whether the company is facing problems.
For instance, by 2012, Nokia (NOK)'s problems were well known and its stock had lost more than 90% of its market value since 2007. But Nokias Operating Margin % had already been in decline since 2002, although its Earnings per Share (Diluted) were still rising. Investors who paid attention to Operating Margin % would have avoided this huge loss. The same can be said for Research-in-Motion (RIMM).
Therefore, Operating Margin % is a very important screening filter for GuruFocus. GuruFocus's Buffett-Munger screener requires that the profit margin is either consistent or expanding. The Model Portfolio of the Buffett-Munger screener has outperformed the market every year since inception in 2009.
Avanta Serviced Office Group Operating Margin % Related Terms
Avanta Serviced Office Group Operating Margin % Historical Data
* 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.
Avanta Serviced Office Group Operating Margin % Chart
LSE:ASOA vs AINC, HCAP, OCCAF: Operating Margin % Comparison
For the Asset Management subindustry, Avanta Serviced Office Group's Operating Margin %, along with its competitors' market caps and Operating 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.
Avanta Serviced Office Group Operating Margin % vs Asset Management Industry
For the Asset Management industry and Financial Services sector, Avanta Serviced Office Group's Operating Margin % distribution charts can be found below:
* The bar in red indicates where Avanta Serviced Office Group's Operating Margin % falls into.
Avanta Serviced Office Group Operating Margin % Calculation
Operating Margin % - also known as operating income margin, operating profit margin and return on sales (ROS) - is the ratio of Operating Income divided by net sales or Revenue, usually presented in percent.
* 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.
Avanta Serviced Office Group (LSE:ASOA) has a Operating Margin % of 8.44% as of Jun. 2014. Operating margin is the ratio of total operating income to net sales. View historical data on Avanta Serviced Office Group and its competitors. This is 64% above median its historical median of 5.16.
Is Avanta Serviced Office Group's Operating Margin % too high?
Avanta Serviced Office Group's current Operating Margin % of 8.44% is 64% above median its 10-year median of 5.16. The Asset Management industry median Operating Margin % is 17.00. Avanta Serviced Office Group's value of 8.44% is 50.4% below this industry median.
How does Avanta Serviced Office Group's Operating Margin % compare to AINC and HCAP?
Avanta Serviced Office Group's Operating Margin % of 8.44% can be compared against companies in the Asset Management industry. The industry median Operating Margin % is 17.00. Avanta Serviced Office Group's value of 8.44% is 50.4% below this benchmark. While the company's 10-year median is 5.16 vs. the industry median of 17.00, Avanta Serviced Office Group 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 Operating Margin % for an Asset Management company?
The median Operating Margin % among Asset Management companies is 17.00, based on 656 companies in the industry. Companies in the top quartile (top 25%) have a Operating Margin % significantly above this median, while those in the bottom quartile fall well below. However, Operating Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Avanta Serviced Office Group's current Operating Margin % of 8.44% is 50.4% 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 Operating Margin % mean?
A high Operating Margin % can signal that a stock is expensive relative to its fundamentals. Operating margin is the ratio of total operating income to net sales. View historical data on Avanta Serviced Office Group and its competitors. For the Asset Management industry, the median Operating Margin % is 17.00 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Avanta Serviced Office Group's current Operating Margin % is 8.44%, which is 64% above median its own 10-year median of 5.16. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Avanta Serviced Office Group stock overvalued right now?
Avanta Serviced Office Group (LSE:ASOA) has a current Operating Margin % of 8.44%. The current Operating Margin % is 8.44%, which is 64% above median its 10-year median of 5.16 and 50.4% below the Asset Management industry median of 17.00. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Operating Margin % calculated?
Operating Margin % is calculated from a company's financial statements. For Avanta Serviced Office Group (LSE:ASOA), the current Operating Margin % is 8.44% as of Jun. 2014. 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.
Serviced Office Group PLC is engaged in the ownership and operation of serviced office accommodation. Its reportable segments are Serviced office business and Managed serviced offices. Serviced office business undertaken in the group's freehold and leasehold properties; and Managed serviced office business undertaken under management contracts on behalf of third parties. The Group operates solely from the UK.
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