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5 Low Price-to-Sales Stocks to Replenish Your Portfolio
Investment in stocks after analyzing valuation metrics is considered one of the best practices. When considering valuation metrics, the price-to-earnings ratio has always been the obvious choice. This is because calculations based on earnings are easy and come in handy. However, the price-to-sales ratio is convenient for determining the value of stocks that are incurring losses or in an early development cycle, generating meager or no profit.
What’s the Price-to-Sales Ratio?
While a loss-making company with a negative price-to-earnings ratio falls out of investor favor, its price-to-sales can indicate the hidden strength of the business. This underrated ratio is also used to identify a recovery situation or ensure a company's growth is not overvalued.
A stock’s price-to-sales ratio reflects how much investors pay for each dollar of revenue generated by a company.
If the price-to-sales ratio is 1, investors are paying $1 for every $1 of revenues generated by the company. A stock with a price-to-sales below 1 is a good bargain as investors need to pay less than a dollar for a dollar’s worth.
Thus, a stock with a lower price-to-sales ratio is a more suitable investment than a stock with a high price-to-sales ratio.
The price-to-sales ratio is often preferred over price-to-earnings, as companies can manipulate their earnings using various accounting measures. However, sales are harder to manipulate and are relatively reliable.
However, one should keep in mind that a company with a high debt and a low price-to-sales ratio is not an ideal choice. The high debt level will have to be paid off at some point, leading to further share issuance, a rise in market cap, and, ultimately, a higher price-to-sales ratio.
In any case, the price-to-sales ratio used in isolation cannot do the trick. One should analyze other ratios like Price/Earnings, Price/Book and Debt/Equity before arriving at any investment decision.
Lakeland Industries, PBF Energy Inc., PagSeguro Digital, Barrett Business Services and JAKKS Pacific are some companies with a low price-to-sales ratio and the potential to offer higher returns.
Here are five of the 17 stocks that qualified the screening:
Lakeland Industries operates as a leading global manufacturer of protective clothing for industry, healthcare and first responders on the federal, state and local levels. LAKE's focus on high-value products and market diversification, particularly in the fire service and industrial product lines, has been aiding its performance.
The company has been committed to its strategic acquisition pipeline and is focused on organic growth for the remainder of the fiscal year. LAKE has a Value Score of A and currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
PBF Energy is a leading refiner of crude. It operates with a diverse asset base consisting of six refineries. The company boasts a higher daily crude processing capacity than most peers. PBF’s refineries play a crucial role in meeting global energy product demand and supporting various sectors, including transportation and manufacturing.
PBF stands out as one of the most complex refining systems in the United States, enabling the production of lighter and superior-grade refined products. PBF Energy’s capacity to produce cleaner and more valuable refined products is a strategic advantage, allowing it to meet market demands for high-quality fuels and petrochemicals. This enhances its competitiveness and profitability in the refining industry. PBF currently has a Zacks Rank #2 and a Value Score of A.
São Paulo, Brazil-based PagSeguro Digital provides financial technology solutions and services for micro-merchants, and small and medium-sized businesses in Brazil and internationally. The company offers multiple digital payment solutions, in-person payments via point-of-sales devices and prepaid card services. PagSeguro Digital has been diversifying its payment business and 2022 marked the consolidation of its HUBs initiative to extend its best-in-class services to small and mid-sized clients.
The company’s disciplined capital allocation has significantly aided operating and investing cash flow generation, positioning it to explore the opportunities in payments and financial services in Brazil in the coming years. The PAGS stock currently has a Value Score of A and a Zacks Rank #2.
Barrett provides business management solutions for small and mid-sized companies in the United States. The company has developed a management platform that integrates a knowledge-based approach from the management consulting industry with tools from the human resource outsourcing industry.
The company has been gaining from an expanding client base and the ongoing rollout of BBSI Benefits. Additionally, Barrett has been witnessing positive results in its pricing and cost-management strategies, leading to strong, sustainable earnings growth. BBSI currently has a Value Score of A and a Zacks Rank #2.
Based in Malibu, CA, JAKKS Pacific is a multi-brand company that has been designing and marketing a broad range of toys and consumer products. The company is benefiting from the FOB business model, strategic acquisitions, a solid international footprint, a focus on innovation, and collaborations with popular brands and movie franchisees. The emphasis on the expansion of retail reach bodes well.
JAKK has emerged as a diversified consumer products company, buoyed by a string of acquisitions over the past several years. The company realized the importance of online retailing and shifted its focus to boosting online sales. JAKK has a Value Score of A and currently flaunts a Zacks Rank #1.
You can get the rest of the stocks on this list by signing up now for your 2-week free trial to the Research Wizard and start using this screen in your own trading. Further, you can also create your own strategies and test them first before taking the investment plunge.
The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your trial to the Research Wizard today. And the next time you read an economic report, open up the Research Wizard, plug your finds in and see what gems come out.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Zacks.com featured highlights include Lakeland Industries, PBF Energy, PagSeguro, Barrett Business Services and JAKKS Pacific
For Immediate Release
Chicago, IL – May 7, 2024 – Stocks in this week’s article are Lakeland Industries (LAKE - Free Report) , PBF Energy Inc. (PBF - Free Report) , PagSeguro Digital (PAGS - Free Report) , Barrett Business Services (BBSI - Free Report) and JAKKS Pacific (JAKK - Free Report) .
5 Low Price-to-Sales Stocks to Replenish Your Portfolio
Investment in stocks after analyzing valuation metrics is considered one of the best practices. When considering valuation metrics, the price-to-earnings ratio has always been the obvious choice. This is because calculations based on earnings are easy and come in handy. However, the price-to-sales ratio is convenient for determining the value of stocks that are incurring losses or in an early development cycle, generating meager or no profit.
What’s the Price-to-Sales Ratio?
While a loss-making company with a negative price-to-earnings ratio falls out of investor favor, its price-to-sales can indicate the hidden strength of the business. This underrated ratio is also used to identify a recovery situation or ensure a company's growth is not overvalued.
A stock’s price-to-sales ratio reflects how much investors pay for each dollar of revenue generated by a company.
If the price-to-sales ratio is 1, investors are paying $1 for every $1 of revenues generated by the company. A stock with a price-to-sales below 1 is a good bargain as investors need to pay less than a dollar for a dollar’s worth.
Thus, a stock with a lower price-to-sales ratio is a more suitable investment than a stock with a high price-to-sales ratio.
The price-to-sales ratio is often preferred over price-to-earnings, as companies can manipulate their earnings using various accounting measures. However, sales are harder to manipulate and are relatively reliable.
However, one should keep in mind that a company with a high debt and a low price-to-sales ratio is not an ideal choice. The high debt level will have to be paid off at some point, leading to further share issuance, a rise in market cap, and, ultimately, a higher price-to-sales ratio.
In any case, the price-to-sales ratio used in isolation cannot do the trick. One should analyze other ratios like Price/Earnings, Price/Book and Debt/Equity before arriving at any investment decision.
Lakeland Industries, PBF Energy Inc., PagSeguro Digital, Barrett Business Services and JAKKS Pacific are some companies with a low price-to-sales ratio and the potential to offer higher returns.
Here are five of the 17 stocks that qualified the screening:
Lakeland Industries operates as a leading global manufacturer of protective clothing for industry, healthcare and first responders on the federal, state and local levels. LAKE's focus on high-value products and market diversification, particularly in the fire service and industrial product lines, has been aiding its performance.
The company has been committed to its strategic acquisition pipeline and is focused on organic growth for the remainder of the fiscal year. LAKE has a Value Score of A and currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
PBF Energy is a leading refiner of crude. It operates with a diverse asset base consisting of six refineries. The company boasts a higher daily crude processing capacity than most peers. PBF’s refineries play a crucial role in meeting global energy product demand and supporting various sectors, including transportation and manufacturing.
PBF stands out as one of the most complex refining systems in the United States, enabling the production of lighter and superior-grade refined products. PBF Energy’s capacity to produce cleaner and more valuable refined products is a strategic advantage, allowing it to meet market demands for high-quality fuels and petrochemicals. This enhances its competitiveness and profitability in the refining industry. PBF currently has a Zacks Rank #2 and a Value Score of A.
São Paulo, Brazil-based PagSeguro Digital provides financial technology solutions and services for micro-merchants, and small and medium-sized businesses in Brazil and internationally. The company offers multiple digital payment solutions, in-person payments via point-of-sales devices and prepaid card services. PagSeguro Digital has been diversifying its payment business and 2022 marked the consolidation of its HUBs initiative to extend its best-in-class services to small and mid-sized clients.
The company’s disciplined capital allocation has significantly aided operating and investing cash flow generation, positioning it to explore the opportunities in payments and financial services in Brazil in the coming years. The PAGS stock currently has a Value Score of A and a Zacks Rank #2.
Barrett provides business management solutions for small and mid-sized companies in the United States. The company has developed a management platform that integrates a knowledge-based approach from the management consulting industry with tools from the human resource outsourcing industry.
The company has been gaining from an expanding client base and the ongoing rollout of BBSI Benefits. Additionally, Barrett has been witnessing positive results in its pricing and cost-management strategies, leading to strong, sustainable earnings growth. BBSI currently has a Value Score of A and a Zacks Rank #2.
Based in Malibu, CA, JAKKS Pacific is a multi-brand company that has been designing and marketing a broad range of toys and consumer products. The company is benefiting from the FOB business model, strategic acquisitions, a solid international footprint, a focus on innovation, and collaborations with popular brands and movie franchisees. The emphasis on the expansion of retail reach bodes well.
JAKK has emerged as a diversified consumer products company, buoyed by a string of acquisitions over the past several years. The company realized the importance of online retailing and shifted its focus to boosting online sales. JAKK has a Value Score of A and currently flaunts a Zacks Rank #1.
You can get the rest of the stocks on this list by signing up now for your 2-week free trial to the Research Wizard and start using this screen in your own trading. Further, you can also create your own strategies and test them first before taking the investment plunge.
The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your trial to the Research Wizard today. And the next time you read an economic report, open up the Research Wizard, plug your finds in and see what gems come out.
Click here to sign up for a free trial to the Research Wizard today.
For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/2268445/5-low-price-to-sales-stocks-to-replenish-your-portfolio
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Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
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Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.