Anytime you read that a company has increased its margins, stop what you’re doing (perhaps kiss your significant other on the cheek with a huge grin) and develop a plan to trade that stock. Margin improvement is a very powerful catalyst that sends stocks higher during earnings season. Essentially, the company is making more on the product it is selling, which, in turn, generally has a positive effect on the performance on the stock. Conversely, falling margins may cause a sharp decline in the price of stock
