Sinking profits warn of future stock-price decline
The analysis links a slowing pattern in corporate profits from 2002 to 2004 with stubborn or falling share prices. It notes profits rose 22.6 percent in 2002 but only 8.1 percent over the year to Q3 2004, while stock gains lagged as profits dwindled. It warns investors to scrutinize profit reports and outlines the long-term relationship between profits and stock values.
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