In this episode, Andrew and Dave revisit the financials of businesses, focusing on operating margins and operating expenses. They explain what operating margin is, how to calculate it, and its significance for investors.
The discussion includes tips on analyzing businesses, the impact of reinvestment strategies, and comparing companies based on their financial metrics. They also delve into the benefits of using tools like Fiscal AI to analyze company data efficiently.
The episode concludes with case studies, including companies like Nvidia, Microsoft, Airbnb, and Coca-Cola, illustrating the application of operating margin analysis in real-world scenarios.
00:00 Introduction to Investing for Beginners
00:17 Understanding Operating Margins
02:06 Using Operating Margins in Stock Analysis
04:08 Calculating Operating Margins
05:24 Components of Operating Expenses
07:35 Analyzing R&D and SG&A Expenses
11:06 Case Studies: Nvidia and Microsoft
15:18 Challenges in R&D Investments
18:05 Return on Invested Capital (ROIC)
24:35 Comparing Companies: AutoZone vs. Tech Giants
30:31 Exploring Newer Tech IPOs
35:43 Conclusion and Final Thoughts
Timestamps are generated by artificial intelligence, and are not 100% accurate depending on the platform used for listening.
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What do Dave and Andrew recommend?
Our #1 recommended stock research platform is FinChat (now Fiscal.ai). Get 2 weeks access for free using our link (no card required): fiscal.ai/ifb
Andrew works really hard to find the best insights he can every single month at Value Spotlight. To see a sample of his previous work, go to stockwriteup.com.
Have questions? Send them to newsletter@einvestingforbeginners.com
Link to Michael Mauboussin's paper:
ROIC and the Investment Process
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