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5 Stocks With Solid Sales Growth to Buy Amid Market Turmoil
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At present, one must consider the changing market backdrop and chalk out an investment strategy to help generate robust returns. Since the beginning of 2022, markets have been bearing the brunt of macroeconomic and geopolitical ambiguity.
Amid such bearish investor sentiments, a conventional stock picking strategy is useful. One such way is selecting stocks with steady sales growth. Hence, stocks like Tesla, Inc. (TSLA - Free Report) , EPAM Systems, Inc. (EPAM - Free Report) , Unum Group (UNM - Free Report) , LPL Financial Holdings Inc. (LPLA - Free Report) and CSX Corporation (CSX - Free Report) are worth betting on.
While assessing business growth, revenues are often more monitored than earnings. This is because investors want to make sure whether a business has the capability of generating more sales over time to cater to an expanding customer base.
Stable or declining sales growth indicates obstacles at the company. Stagnant companies may generate near-term profit but do not ensure enough growth to attract new investors.
Without impressive revenue growth, bottom-line improvement may not be sustainable over the long term. While a company can show earnings strength by lowering costs, continuous bottom-line improvement usually requires robust sales growth.
Nonetheless, sales growth alone doesn’t indicate much about a company’s future performance. So, taking into consideration a company’s cash position along with its sales number can prove to be a more dependable investment strategy. Substantial cash in hand and a steady cash flow give a company more flexibility with respect to business decisions and potential investments.
Selecting the Winning Stocks
To shortlist stocks with impressive sales growth and a high cash balance, we have selected 5-Year Historical Sales Growth (%) greater than X-Industry and Cash Flow more than $500 million as our main screening parameters.
But sales growth and cash strength are not the absolute criteria for selecting stocks. Hence, we have added other factors to arrive at a winning strategy.
P/S Ratio less than X-Industry: This metric determines the value placed on each dollar of a company’s revenues. The lower the ratio, the better it is for picking a stock since the investor is paying less for each unit of sales.
% Change F1 Sales Estimate Revisions (four weeks) greater than X-Industry: Estimate revisions, better than the industry, are often seen to trigger an increase in stock price.
Operating Margin (average last five years) greater than 5%: Operating margin measures how much every dollar of a company's sales translates into profits. A high ratio indicates that the company has good cost control and sales are increasing faster than costs — an optimal situation.
Return on Equity (ROE) greater than 5%: This metric will ensure that sales growth is translated into profits and the company is not hoarding cash. A high ROE means that the company is spending wisely and is in all likelihood profitable.
Here are five of the 21 stocks that qualified the screening:
Austin, TX-based Tesla is the market leader in battery-powered electric car sales in the United States, with roughly 70% market share. TSLA operates under two segments: Automotive and Energy Generation & Storage.
Tesla’s expected sales growth rate for 2022 is 58.4%. The stock currently carries a Zacks Rank #2.
Based in Newtown, PA, EPAM Systems is well known for its software engineering and IT consulting services. EPAM is engaged in providing software product development services, custom application development services, application testing services, application maintenance and support services, infrastructure management services and enterprise information management services.
EPAM Systems’ sales are expected to jump 29.4% for 2022. The stock sports a Zacks Rank #1 at present.
Based in Chattanooga, TN, Unum provides financial protection benefit solutions. UNM operates its business through four segments – Unum U.S., Closed Block, Colonial Life and Unum International.
Unum’s expected sales growth for 2022 is 1.2%. The company, at present, sports a Zacks Rank #1.
LPL Financial, based in Boston, MA, is a clearing broker-dealer and an investment advisory firm. LPLA acts as an agent for its advisors, on behalf of their clients, by providing access to a broad array of financial products and services.
LPL Financial’s expected sales growth rate for 2022 is 10.8%. The stock sports a Zacks Rank #1 at present.
Headquartered in Jacksonville, FL, CSX Corp is one of the United States’ leading transportation companies. CSX offers rail-based freight transportation services like traditional rail service, transport of intermodal containers and trailers apart from rail-to-truck transfers.
CSX Corp’s expected sales growth rate for 2022 is 17.7%. The stock carries a Zacks Rank #2 currently.
Get the rest of the stocks on the list and start putting this and other ideas to the test. It can all be done with the Research Wizard stock picking and backtesting software.
The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.
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.
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5 Stocks With Solid Sales Growth to Buy Amid Market Turmoil
At present, one must consider the changing market backdrop and chalk out an investment strategy to help generate robust returns. Since the beginning of 2022, markets have been bearing the brunt of macroeconomic and geopolitical ambiguity.
Amid such bearish investor sentiments, a conventional stock picking strategy is useful. One such way is selecting stocks with steady sales growth. Hence, stocks like Tesla, Inc. (TSLA - Free Report) , EPAM Systems, Inc. (EPAM - Free Report) , Unum Group (UNM - Free Report) , LPL Financial Holdings Inc. (LPLA - Free Report) and CSX Corporation (CSX - Free Report) are worth betting on.
While assessing business growth, revenues are often more monitored than earnings. This is because investors want to make sure whether a business has the capability of generating more sales over time to cater to an expanding customer base.
Stable or declining sales growth indicates obstacles at the company. Stagnant companies may generate near-term profit but do not ensure enough growth to attract new investors.
Without impressive revenue growth, bottom-line improvement may not be sustainable over the long term. While a company can show earnings strength by lowering costs, continuous bottom-line improvement usually requires robust sales growth.
Nonetheless, sales growth alone doesn’t indicate much about a company’s future performance. So, taking into consideration a company’s cash position along with its sales number can prove to be a more dependable investment strategy. Substantial cash in hand and a steady cash flow give a company more flexibility with respect to business decisions and potential investments.
Selecting the Winning Stocks
To shortlist stocks with impressive sales growth and a high cash balance, we have selected 5-Year Historical Sales Growth (%) greater than X-Industry and Cash Flow more than $500 million as our main screening parameters.
But sales growth and cash strength are not the absolute criteria for selecting stocks. Hence, we have added other factors to arrive at a winning strategy.
P/S Ratio less than X-Industry: This metric determines the value placed on each dollar of a company’s revenues. The lower the ratio, the better it is for picking a stock since the investor is paying less for each unit of sales.
% Change F1 Sales Estimate Revisions (four weeks) greater than X-Industry: Estimate revisions, better than the industry, are often seen to trigger an increase in stock price.
Operating Margin (average last five years) greater than 5%: Operating margin measures how much every dollar of a company's sales translates into profits. A high ratio indicates that the company has good cost control and sales are increasing faster than costs — an optimal situation.
Return on Equity (ROE) greater than 5%: This metric will ensure that sales growth is translated into profits and the company is not hoarding cash. A high ROE means that the company is spending wisely and is in all likelihood profitable.
Zacks Rank less than or equal to 2: Zacks Rank #1 (Strong Buy) or 2 (Buy) stocks are known to outperform, irrespective of the market environment. You can see the complete list of today’s Zacks #1 Rank stocks here.
Here are five of the 21 stocks that qualified the screening:
Austin, TX-based Tesla is the market leader in battery-powered electric car sales in the United States, with roughly 70% market share. TSLA operates under two segments: Automotive and Energy Generation & Storage.
Tesla’s expected sales growth rate for 2022 is 58.4%. The stock currently carries a Zacks Rank #2.
Based in Newtown, PA, EPAM Systems is well known for its software engineering and IT consulting services. EPAM is engaged in providing software product development services, custom application development services, application testing services, application maintenance and support services, infrastructure management services and enterprise information management services.
EPAM Systems’ sales are expected to jump 29.4% for 2022. The stock sports a Zacks Rank #1 at present.
Based in Chattanooga, TN, Unum provides financial protection benefit solutions. UNM operates its business through four segments – Unum U.S., Closed Block, Colonial Life and Unum International.
Unum’s expected sales growth for 2022 is 1.2%. The company, at present, sports a Zacks Rank #1.
LPL Financial, based in Boston, MA, is a clearing broker-dealer and an investment advisory firm. LPLA acts as an agent for its advisors, on behalf of their clients, by providing access to a broad array of financial products and services.
LPL Financial’s expected sales growth rate for 2022 is 10.8%. The stock sports a Zacks Rank #1 at present.
Headquartered in Jacksonville, FL, CSX Corp is one of the United States’ leading transportation companies. CSX offers rail-based freight transportation services like traditional rail service, transport of intermodal containers and trailers apart from rail-to-truck transfers.
CSX Corp’s expected sales growth rate for 2022 is 17.7%. The stock carries a Zacks Rank #2 currently.
Get the rest of the stocks on the list and start putting this and other ideas to the test. It can all be done with the Research Wizard stock picking and backtesting software.
The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.
Click here to sign up for a free trial to the Research Wizard today.
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.
Disclosure: Performance information for Zacks’ portfolios and strategies are available at: https://www.zacks.com/performance