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Image: Bigstock featured highlights include: CarMax, Crown Holdings, CenterPoint Energy, Nutrien and Xylem

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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.

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Strong Stocks that Should Be in the News

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