7 low-cost stocks to salvage for promising returns – November 10, 2021



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 price-to-sale ratio has become a practical tool for determining the value of stocks recording losses or 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 of a stock reflects the amount that investors pay for every dollar in 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 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.

The price-to-sales ratio is often preferred over the price-to-earnings ratio because companies can manipulate their profits using various 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 low price / 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-sales 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.

Screening parameters

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 35 actions that qualified the screening:

American outdoor brands (AUGUST Free Report) provides outdoor products and accessories for rugged outdoor enthusiasts in the United States and around the world. It offers hunting, fishing, camping, shooting, personal safety and defense products. Its products include shooting supplies, racks, safes and other related accessories; lifestyle products; land management tools for hunting preparation; harvesting of products for post-hunting or post-fishing activities; electro-optical devices; and survival, camping and emergency preparedness products. The company sells its products through e-commerce and traditional distribution channels under the Marksman, Defender, Harvester and Adventure brands. The stock currently has a Zacks Rank # 2 and a Value Score of A.

Brown County, WI Schneider National (SNDR Free Report) is a leading transportation and logistics services company. The company offers a portfolio of industry-leading truck, intermodal and logistics solutions. The company’s offerings include dry van, bulk transportation, intermodal management and supply chain. 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 # 1 and a Value Score of B. It has a 3-5 year EPS growth rate of 17.9%.

MarineMax, Inc. (HZO Free Report) is a pleasure craft and yacht retailer 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.

Based in Minnesota The Mosaic Company (MOS Free Report) 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 business of food giant Cargill Incorporated and IMC Global Inc. Mosaic is the world’s largest integrated phosphate producer and is also among the top four potash producers. in the world. 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.

Silicon motion technology (SIMO Free Report) 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 (“OEMs”) 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%.

TravelCenters of America Inc. (AT Free Report) operates travel centers and stand-alone restaurants in the United States and Canada. Its travel centers offer a range of products and services, including diesel fuel and gasoline, diesel exhaust fluids, 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 restaurants under franchise agreements. The stock currently has an A value score and a Zacks rank 1.

Standard Motor Products, Inc. (SMP Free Report) 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 and original equipment market. The stock currently has an A value score and 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 of the Research Assistant and start using this screen in your own trading. Plus, you can also create your own strategies and test them out before you get into investing.

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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.

Disclosure: Information on the performance of Zacks’ portfolios and strategies can be found at: https://www.zacks.com/performance.



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