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No. of Recommendations: 2
Personally, I don't demand a particular profit margin. A higher one is better, but I don't have a particular cutoff. On the other hand, I do believe that it's better to disqualify a "marginal" stock than buy one that you're less than happy with. In your position, I would probably read through that section of the book again and decide if I thought the 10% criteria was crucial in light of what I knew about the company. (Is it in an industry with lower profit margins? Has the margin risen or fallen significantly?) Also, make a quick summary of the good and bad things about the company (beyond the criteria it satisfies or doesn't). What are the risks facing this company? How much do you think it's worth?

Another idea would be to just put this stock on hold and try to find something else that does meet the criteria exactly; you don't have to make a quick decision on any particular stock. That way you could get a better idea of what small cap opportunities are out there before putting money on the line.

If I may ask, what company are you considering?
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