Buy these 7 stocks at a low selling price for a winning portfolio
The price-to-sales ratio of a stock reflects the amount that investors pay for every dollar of revenue generated by a company.
If the price / sale ratio is 1, investors pay $ 1 for every $ 1 in revenue generated by the business. So, a stock with a sell price of less than 1 is a good deal because investors have to pay less than a dollar for the dollar.
Thus, a stock with a lower price / sell ratio is a more appropriate investment than a stock with a high price / sell ratio.
Investing in stocks after a valuation metrics analysis is generally considered to be one of the best practices. When considering valuation metrics, the price / earnings ratio has always been the obvious choice. Indeed, income-based calculations are easy and useful. However, the sell price has become a practical tool for determining the value of stocks that are losing or are in an early development cycle, generating little or no profit.
As a loss-making company with a negative price-to-earnings ratio falls out of favor with investors, its price-to-sales ratio could indicate the company’s hidden strength. This underestimated ratio also makes it possible to identify a recovery situation or to ensure that the growth of a company is not overestimated.
The price-to-sales ratio is often preferred over the price-to-earnings ratio because companies can manipulate their profits using a variety of accounting measures. However, sales are more difficult to handle and are relatively reliable.
However, it should be borne in mind that a business with high debt and a low price-to-sales ratio is not an ideal choice. The high level of debt will have to be repaid at some point, which will lead to new issuance of shares, an increase in market capitalization and, ultimately, a higher price-to-sell ratio.
In any case, the price / sales ratio used in isolation cannot do the trick. Other ratios such as price / earnings, price / pound, and debt / equity should also be analyzed before making an investment decision.
Selling price lower than the median selling price for its industry: The lower the price / sale ratio, the better.
The price / earnings ratio using the F (1) estimate is lower than the median price / earnings ratio for its industry: The lower the better.
Reservation price (common shares) lower than the median reservation price for its industry: This is another parameter to ensure the value of a stock.
Debt to equity (most recent) lower than median Debt to equity for its industry: A business with less debt should have a stable price-to-sales ratio.
Current price greater than or equal to $ 5: The shares should trade at a minimum of $ 5 or more.
Rank of Zacks less than or equal to # 2: Zacks Rank # 1 (Strong Buy) or 2 (Buy) stocks are known to outperform regardless of the market environment.
Score value less than or equal to B: Our research shows that stocks with a value score of A or B, when combined with a Zacks # 1 or 2 ranking, offer the best opportunities in the value investing space.
Here are seven of the 32 actions that qualified the screening:
Bookmark Jewelers Limited SIG is a retailer of diamond jewelry, watches and other products. The company operates in the United States, Canada, United Kingdom, Republic of Ireland and the Channel Islands. The stock currently has a Zacks Rank # 1 and Value Score of A. It has a 3-5 year EPS growth rate of 8%.
Based in New York GIII Clothing Group, LTD. GIII is a manufacturer, designer and distributor of apparel and accessories under licensed brands, owned brands and private labels. The company’s portfolio includes outerwear, dresses, sportswear, swimwear, women’s suits and performance wear, women’s handbags, footwear, small leather goods, cold weather accessories and luggage. G-III has more than 30 licensed and exclusive brands, including five major global brands: DKNY, Donna Karan, Calvin Klein, Tommy Hilfiger and Karl Lagerfeld. The stock currently has a Zacks Rank # 1 and a Value Score of A.
Urban Outfitters, Inc. URBN is a lifestyle retailer offering fashionable clothing and accessories, footwear, home decor items and gifts. The company’s merchandise is typically sold directly to consumers through stores, catalogs, call centers, and e-commerce platforms. The company is present in the United States, Canada and Europe. The stock currently has a Zacks Rank # 1 and a Value Score of B. It has a 3 to 5 year EPS growth rate of 18%.
Kinder Morgan, Inc. KMI is one of the leading providers of intermediate energy infrastructure in North America. The company operates pipelines spanning 83,000 miles to transport natural gas, crude oil, condensate, refined petroleum products, CO2 and other products. Kinder Morgan also has 144 terminals used for the storage of liquid products including ethanol, chemicals and petroleum products. The terminals also store and tranship petroleum coke, metals and minerals. The 3 to 5 year EPS growth rate for the stock is estimated at 3%. The stock currently has a value score of B and a rank 2 of Zacks. You can see The full list of today’s Zacks # 1 Rank stocks here.
Brown County, WI Schneider National, Inc. SNDR is a leading company in transport and logistics services. The company offers a portfolio of industry-leading truck, intermodal and logistics solutions. It operates one of the largest fleets of for-hire trucks in North America. In 2020, the company served approximately 9,250 customers, including many well-known companies. The stock currently has a Zacks Rank # 2 and Value Score of A. It has a 3-5 year EPS growth rate of 17.9%.
Hilltop Holdings Inc. HTH is a financial holding company. It provides banking services to individuals and businesses through PlainsCapital Bank. It offers a wide range of financial products and services through brokers (Hilltop Securities Inc. and Hilltop Securities Independent Network Inc.) as well as mortgage origination (PrimeLending). The stock currently has an A value score and a Zacks rank 2.
Standard Motor Products, Inc. SMP is one of the leading manufacturers, distributors and distributors of premium automotive aftermarket parts for engine management and temperature control systems. It mainly focuses on the heavy and original industrial equipment market. The stock currently has a value score of B and a rank of Zacks # 1.
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Hilltop Holdings Inc. (HTH): Free Stock Analysis Report
Urban Outfitters, Inc. (URBN): Free Stock Analysis Report
Signet Jewelers Limited (SIG): Free Stock Analysis Report
Standard Motor Products, Inc. (SMP): Free Stock Analysis Report
GIII Clothing Group, LTD. (GIII): Free stocks analysis report
Kinder Morgan, Inc. (KMI): Free Stock Analysis Report
Schneider National, Inc. (SNDR): Free Inventory Analysis Report
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