Buy These 5 Low Selling Stocks For A Rewarding Portfolio
IInvesting in equities after a valuation metrics analysis is generally considered to be best practice. When considering valuation metrics, the price / earnings ratio has always been the obvious choice. Indeed, calculations based on income are easy and useful. However, the sell price has become a practical tool for determining the value of stocks that are losing money or are in an early cycle of development, 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 of a stock reflects the amount that investors pay for every dollar of income generated by a business.
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 ratio 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.
To this end, MarineMax, Inc. HZO, Silicon motion technology SIMO, The Mosaic Company MOS, TravelCenters of America Inc. AT and Standard Motor Products, Inc. SMP was selected as the stocks with potential today.
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 an F (1) estimate 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 security.
Debt to equity (most recent) lower than the 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.
Value Note 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 five of the 38 actions that qualified the screening:
MarineMax is a retailer of pleasure craft and yachts in the United States. The company sells new and used pleasure craft, including pleasure craft, boats and pleasure craft; mega-yachts, sport yachts and other yachts; fishing boats; motor and convertible yachts; pontoon boats; fishing boats; ski boats; and jet boats. It also supplies marine parts and accessories, boat covers, trailer parts, water sports accessories, high performance accessories and a range of nautical accessories. The stock currently has a Zacks Rank # 2 and a Value Score of A.
Silicon motion technology is a leading developer of microcontroller integrated circuits for NAND flash storage devices. The semiconductor company also designs, develops and markets high performance, low power semiconductor solutions for original equipment manufacturers (âOEMsâ) and other customers. The stock currently has a Zacks Rank # 2 and a Value Score of B. It has a 3 to 5 year EPS growth rate of 8%.
based in minnesota The Mosaic Company is a leading producer and distributor of phosphate and potash concentrates for the global agricultural industry. It was formed through the combination of the fertilizer businesses of food giant Cargill Incorporated and IMC Global Inc. Mosaic is the world’s largest integrated phosphate producer and is also one of the world’s four largest potash producers. The 3 to 5 year EPS growth rate for the stock is estimated at 7%. The stock currently has an A value score and a Zacks rank 2. You can see The full list of today’s Zacks # 1 Rank stocks here.
Travel Centers of America operates stand-alone travel centers and restaurants in the United States and Canada. Its travel centers offer a range of products and services, including diesel fuel and gasoline, diesel exhaust fluid, truck repair and maintenance, and highway services. It also operates full service and quick service restaurants, as well as a variety of guest amenities. It operates franchised restaurants. The stock currently has an A value score and a # 1 Zacks rank.
Standard Motor Products is a leading manufacturer, distributor and distributor of premium automotive aftermarket parts for engine management and temperature control systems. It mainly focuses on the heavy industrial equipment and original equipment market. The stock currently has an A value score and a Zacks rank 2.
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Disclosure: Officers, directors and / or employees of Zacks Investment Research may own or have sold securities short and / or hold long and / or short positions in options mentioned in this document. An affiliated investment advisory firm may own or have sold securities short and / or hold long and / or short positions in options mentioned in this document.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.