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Zacks.com featured highlights include Steelcase, SPAR Group, OneSpaWorld and Brady

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For Immediate Release

Chicago, IL – July 8, 2024 – Stocks in this week’s article are Steelcase Inc. (SCS - Free Report) , SPAR Group, Inc. (SGRP - Free Report) , OneSpaWorld Holdings Ltd. (OSW - Free Report) and Brady Corp. (BRC - Free Report) .

4 Stocks Worth Buying Now on Solid Net Profit Margins

Investors focus on businesses that consistently generate profits, and net profit margin is a key metric for assessing profitability. A higher net margin indicates a company's efficiency in converting sales into actual profits, providing insights into its operational effectiveness and the challenges it faces. Companies like Steelcase Inc., SPAR Group, Inc., OneSpaWorld Holdings Ltd. and Brady Corp. exhibit strong net profit margins.

Net Profit Margin = Net Profit / Sales * 100

Net profit represents the amount a company retains after all costs, interest, depreciation, taxes, and other expenses are deducted. The net profit margin can serve as a valuable indicator of a company's operational strength and cost management. Higher net profits are crucial for rewarding stakeholders and attracting skilled employees, which ultimately enhances business value. Additionally, a higher net profit margin compared to competitors provides a competitive edge.

Pros and Cons of Net Profit Margin

Net profit margin offers investors clarity on a company’s business model, including its pricing policy, cost structure and manufacturing efficiency. A strong net profit margin is preferred by all types of investors. However, this metric has its limitations. It varies significantly across industries, and while net income is crucial in traditional sectors, it is less relevant for technology companies. Differences in accounting treatments, particularly for non-cash expenses like depreciation and stock-based compensation, can complicate comparisons.

Moreover, companies that grow through debt rather than equity funding incur higher interest expenses, which can negatively impact net profit. In such cases, the net profit margin becomes less effective for evaluating performance. Despite these challenges, net profit margin remains a fundamental measure for understanding a company's profitability and operational efficiency.

The Winning Strategy

A healthy net profit margin and solid EPS growth are the two most sought-after elements in a business model.

Apart from these, we have added a few criteria to ensure maximum returns from this strategy.

Here we discuss our four picks from the 27 stocks that qualified the screen:

Steelcase is a designer and manufacturer of products used to create high-performance work environments. Its product portfolio includes furniture systems, seating, storage, desks, casegoods, interior architectural products, technology products and related products and services. The stock currently sports a Zacks Rank of 1 and has a VGM Score of B.

The Zacks Consensus Estimate for Steelcase’s fiscal 2025 earnings has been revised upward by 8 cents to $1.00 per share in the past 30 days. Steelcase surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 57.1%.

SPAR Group is a supplier of in-store merchandising and marketing services, and premium incentive marketing services throughout the United States and Canada. The stock sports a Zacks Rank of 1 at present and has a VGM Score of B.

The Zacks Consensus Estimate for SPAR Group’s 2024 earnings has been revised upward to 31 cents per share from 6 cents in the past 60 days. SGRP surpassed the Zacks Consensus Estimate thrice in the trailing four quarters while missing the same on one occasion, the average surprise being 418.8%.

OneSpaWorld is a provider and innovator in the fields of wellness, beauty, rejuvenation and transformation on cruise ships and on land. The stock currently carries a Zacks Rank of 2 and has a VGM Score of A.

The Zacks Consensus Estimate for OneSpaWorld’s 2024 earnings has been revised upward by 3 cents to 81 cents per share in the past 60 days. OSW surpassed the Zacks Consensus Estimate thrice in the trailing four quarters while missing the same on one occasion, the average surprise being 4.7%.

Brady is a world leader in complete identification solutions that help companies improve productivity, performance, safety and security. The stock carries a Zacks Rank of 2 at present and has a VGM Score of B.

The Zacks Consensus Estimate of $4.35 per share for Brady’s fiscal 2025 earnings has moved 10 cents north in the past 60 days. BRC surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 6.7%.

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 For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/2297125/4-stocks-worth-buying-now-on-solid-net-profit-margin

Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.

Contact: Jim Giaquinto

Company: Zacks.com

Phone: 312-265-9268

Email: pr@zacks.com

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.

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