Likewise, by contrast, at the other end of the extreme, you find a lot of companies selling at three times revenue, as opposed to 30% of revenue, and three times revenue is a company selling at 30 times earnings, making 10% in that after-tax margin.
While WellPoint has after-tax margins of 4 to 5 percent, 1-800 Contacts has double-digit margins, according to Mr. DeVeydt.
"At the peak of the last business cycle, after-tax margins for the S.& P. 500 were 5.6percentt," Mr. Applegate said.
And that, after-tax margins, in many industries might be an easy hurdle to accomplish sometime off in the future.
If a company's selling at 30% of revenue, then that's the equivalent to 10 times earnings if they were making 3% in that after-tax margins.
I can't tell if it's going to be in 2011, or 2012, or 2013, but I got to believe they're going to be able to make 3% in that after-tax margins.
That is a net after-tax profit margin of 28percentt, far higher than that of most old-economy companies.
Schwab's revenue rose 65percentto to $1.57 billion, and its after-tax profit margin increased to 18.1percentt from 15percentt.
Wonga's return on shareholders' equity is about 30% and after-tax profit margins are 20%.
Both pretax and after-tax profit margins stand fully recovered in comparison with previous economic cycles.
As a result, after-tax operating income margin was at 10%.
