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5 Stocks with Upbeat Sales Growth Worth Betting On Right Now
Consistent growth in sales is the key to survival of any business. For any company, sales growth not only provides an insight into product demand and pricing power, but is also important for growth projections and strategic decision making.
Yet, investors often fail to consider sales growth as a dependable metric. One of the main reasons for this could be investors' preconceived notion that a company's stock price is generally sensitive to its earnings momentum.
Nevertheless, it should be kept in mind that in case a company incurs a loss (although temporarily), it is valued on its revenues as top-line growth (or decline) is usually an indicator of a company's future earnings performance. Further, in an improving economy, absence of sales growth indicates that the company's market share is not increasing. Hence, some sustained sales growth is necessary to support the bottom line.
Hence, Price-to-Sales (P/S) ratio can turn out to be an appropriate metric for stock valuation. The importance of the metric is suggested by the fact that management has limited opportunities to manipulate revenues unlike earnings.
However, a huge sales number does not necessarily convert into profits. Hence, it's more prudent to consider a company's cash position along with its sales number. Substantial cash in hand and a steady cash flow lend a company more flexibility with respect to business decisions and investments.
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
About Screen of the Week
Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine. But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year. See these high-potential stocks free >>.
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.
See More Zacks Research for These Tickers
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Zacks.com featured highlights include: CarMax, Crown Holdings, CenterPoint Energy, Nutrien and Xylem
For Immediate Release
Chicago, IL – July 9, 2021 – Stocks in this week’s article are CarMax, Inc. (KMX - Free Report) , Crown Holdings, Inc. (CCK - Free Report) , CenterPoint Energy, Inc. (CNP - Free Report) , Nutrien Ltd. (NTR - Free Report) and Xylem Inc. (XYL - Free Report) .
5 Stocks with Upbeat Sales Growth Worth Betting On Right Now
Consistent growth in sales is the key to survival of any business. For any company, sales growth not only provides an insight into product demand and pricing power, but is also important for growth projections and strategic decision making.
Yet, investors often fail to consider sales growth as a dependable metric. One of the main reasons for this could be investors' preconceived notion that a company's stock price is generally sensitive to its earnings momentum.
Nevertheless, it should be kept in mind that in case a company incurs a loss (although temporarily), it is valued on its revenues as top-line growth (or decline) is usually an indicator of a company's future earnings performance. Further, in an improving economy, absence of sales growth indicates that the company's market share is not increasing. Hence, some sustained sales growth is necessary to support the bottom line.
Hence, Price-to-Sales (P/S) ratio can turn out to be an appropriate metric for stock valuation. The importance of the metric is suggested by the fact that management has limited opportunities to manipulate revenues unlike earnings.
However, a huge sales number does not necessarily convert into profits. Hence, it's more prudent to consider a company's cash position along with its sales number. Substantial cash in hand and a steady cash flow lend a company more flexibility with respect to business decisions and investments.
For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/1759057/5-stocks-with-upbeat-sales-growth-worth-betting-on-right-now
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
About Screen of the Week
Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine. But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year. See these high-potential stocks free >>.
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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.