For Immediate Release
Chicago, IL – November 4, 2022 – Stocks in this week’s article are DISH Network Corp. DISH, PBF Energy Inc. PBF, TravelCenters of America Inc. TA, DCP Midstream, LP DCP and Ryder System R.
5 Low Price-to-Sales Stocks to Play the Current Market
Investment in stocks after the analysis of the 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 cycle of development, generating meager or no profit.
What's Price-to-Sales Ratio?
While a loss-making company with a negative price-to-earnings ratio falls out of investors' favor, its price-to-sales could indicate the hidden strength of the business. This underrated ratio is also used to identify a recovery situation or ensure that 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. So, 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 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 also analyze other ratios like Price/Earnings, Price/Book and Debt/Equity before arriving at any investment decision.
DISH Network Corp., PBF Energy Inc., TravelCenters of America Inc., DCP Midstream, LP and Ryder System are some stocks that have a low price-to-sales ratio and the potential to offer higher returns.
Here are five of the 20 stocks that qualified the screening:
DISH Network provides pay-TV services in the United States. The company operates in two segments, Pay-TV and Wireless. It offers a wide selection of local, regional and national HD programming. It also provides DVRs (including Hopper whole-home HD DVR), multiple tuner receivers, 1080p and 4K video on demand, and external hard drives. DISH's focus on acquiring and retaining subscribers, who will be profitable over the long term, is expected to drive growth.
Partnerships with the likes of Qualcomm, Aviat, Everstream, Segra, Uniti, Zayo, Mavenir, Fujitsu, Altiostar, VMware, MATRIXX Software and Crown Castle for DISH's standalone 5G network are other key catalysts. These initiatives bode well for DISH's top-line growth in the long haul. DISH currently has a Zacks Rank #2 and a Value Score of A.
PBF Energy is a leading refiner of crude. Through five oil refineries and associated infrastructure in the United States, the company provides end-products that comprise heating oil, transportation fuels, lubricants and many related products. The refineries can collectively process 900,000 barrels of crude every day.
PBF has one of the most complex refining systems in the United States, with an overall Nelson Complexity Index reading of 13.2. This reflects that its oil refineries, which can generate lighter and better grades of refined products, are more sophisticated than most of the other refiners. PBF currently sports a Zacks Rank #1 and has a Value Score of A.
TravelCenters of America operates travel centers and standalone 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 roadside services.
TravelCenters of America also operates full-service and quick-service restaurants, and various customer amenities. It operates restaurants under the franchise agreement. TA currently has a Value Score of A and sports a Zacks Rank #1. You can see the complete list of today's Zacks #1 Rank stocks here.
DCP Midstream is a leading energy infrastructure firm. The Fortune 500 firm has a strong and sustainable business strategy, with a diversified portfolio of gathering, logistics, marketing and processing assets across nine states. DCP Midstream's business model is designed to earn stable fee-based revenues from key midstream assets that are being utilized by shippers and customers over a long period.
Based in Denver, CO, DCP Midstream, a master limited partnership, was created in 2005. The leading midstream energy player is banking on strong fee-based earnings from its long-term contracted business related to logistics and marketing. The DCP stock currently has a Value Score of A and a Zacks Rank #2.
Florida-based Ryder System is recognized as one of the world's largest providers of integrated logistics and transportation solutions. Ryder's customers range from small businesses to large international enterprises. They are drawn from a wide variety of industries, the most significant of which include automotive, electronics, transportation, grocery, lumber and wood products, food service, and home furnishing.
Ryder is benefiting from improving economic and freight conditions in the United States. The stock currently has a Value Score of A and a Zacks Rank #2.
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For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/2013351/5-low-price-to-sales-stocks-to-play-in-the-current-market
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Ryder System, Inc. (R) : Free Stock Analysis Report
DISH Network Corporation (DISH) : Free Stock Analysis Report
TravelCenters of America LLC (TA) : Free Stock Analysis Report
PBF Energy Inc. (PBF) : Free Stock Analysis Report
DCP Midstream Partners, LP (DCP) : Free Stock Analysis Report
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