Knowledge exchange with Heavy Moat Investments
Nice answers. Wide margins make cash flows less risky. When margins expand, it is easier to cover fixed costs including interest expenses. They also increase returns on capital and reinvestment opportunities. All of these justify higher multiples.
Thank you Edmund, for your kind words and for sharing your insights.
Nice answers. Wide margins make cash flows less risky. When margins expand, it is easier to cover fixed costs including interest expenses. They also increase returns on capital and reinvestment opportunities. All of these justify higher multiples.
Thank you Edmund, for your kind words and for sharing your insights.