Check out this week’s Danger Zone interview with Chuck Jaffe of Money Life and MarketWatch.com.

OXM investors should be worried. They are knee-deep in a strategy that is not working.

Investing in declining assets is the wrong plan. In today’s Danger Zone report we discuss the giant difference between revenue and profit growth.

Buying other companies to increase sales is common. Many companies believe they can take revenue from the new acquisition and convert it into bottom line cash flow through operational efficiency.

But at what point does a CEO admit it’s not working and dump the losing asset? When a company sees a need to put surplus capital to work, they either buy back shares or invest in new assets. This is very similar to why you and I invest. We desire a return on capital.

In this report’s lesson, Oxford Industries is an example of a public company failing to improve the bottom line while top line numbers look strong. Smart investors understand that you can’t grow a company with declining cash flows and profits.

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André Rouillard contributed to this report.
Disclosure: David Trainer and André Rouillard receive no compensation to write about any specific stock, sector, or theme.

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