There are sectors where even the top firms have single-digit margins (or, at best, in very low double-digits). But stocks from these sectors have also created big wealth. The reason: The overall market size is so big that even small but stable margins can deliver a high return on equity and create wealth. So, before zeroing in on any stock, look at the overall size of the business. The chances of finding a wealth-creator stock increases manifold if the sector is on a growth path. The reason could be as simple as that it fulfills a basic need, or as complex as change in technology leading to a transformation of the sector.
