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5 Stocks With Solid Sales Growth to Bet On Amid Market Mayhem
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Since the beginning of 2022, markets have been bearing the brunt of macroeconomic and geopolitical uncertainty. These have caused all major indexes to slip into the bear market as investors brace for economic hardship owing to the Federal Reserve’s ultra-aggressive monetary tightening to tame inflation.
Amid such serious concerns and market volatility, investors are cautious about entering the market. So, a conventional stock-picking strategy is the need of the hour for generating robust returns. One such method is picking stocks with steady sales growth. In this regard, stocks like W.R. Berkley Corp. (WRB - Free Report) , Crocs, Inc. (CROX - Free Report) , Boyd Gaming Corporation (BYD - Free Report) , Boise Cascade Company (BCC - Free Report) and TELUS Corporation (TU - Free Report) are worth a look.
While evaluating any company, 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 strong 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.
Nevertheless, sales growth alone doesn’t indicate much about a company’s prospects. Hence, 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 Potential 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 18 stocks that qualified the screening:
W.R. Berkley, based in Greenwich, CT, is one of the nation’s largest commercial lines property casualty insurance providers. WRB offers a variety of insurance services from reinsurance to workers comp third-party administrators.
W.R. Berkley’s expected sales growth rate for 2022 is 15.3%. The stock sports a Zacks Rank #1 at present.
Headquartered in Broomfield, CO, Crocs is one of the leading footwear brands with its focus on comfort and style. Famous for its iconic clog material, CROX’s simple design and great comfort were an instant hit among consumers.
Crocs’ expected sales growth rate for 2022 is 49.8%. The stock currently carries a Zacks Rank #2.
Based in Las Vegas, NV, Boyd Gaming is a multi-jurisdictional gaming company. BYD owns and operates gaming entertainment properties in Nevada, Illinois, Indiana, Iowa, Kansas, Louisiana, Mississippi, Missouri, Ohio and Pennsylvania.
Boyd Gaming’s sales are expected to rise 3.2% for 2022. The stock carries a Zacks Rank #2 at present.
Based in Boise, ID, Boise Cascade manufactures wood products and distributes building materials in the United States and Canada. BCC operates through two segments, Wood Products and Building Materials Distribution.
Boise Cascade’s expected sales growth for 2022 is 9.5%. The company, at present, sports a Zacks Rank #1.
Headquartered in Vancouver, TELUS is one of the largest telecom carriers in Canada (the largest in western Canada), covering 95% of the country’s population.
TELUS’ expected sales growth rate for 2022 is 2.8%. 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 Bet On Amid Market Mayhem
Since the beginning of 2022, markets have been bearing the brunt of macroeconomic and geopolitical uncertainty. These have caused all major indexes to slip into the bear market as investors brace for economic hardship owing to the Federal Reserve’s ultra-aggressive monetary tightening to tame inflation.
Amid such serious concerns and market volatility, investors are cautious about entering the market. So, a conventional stock-picking strategy is the need of the hour for generating robust returns. One such method is picking stocks with steady sales growth. In this regard, stocks like W.R. Berkley Corp. (WRB - Free Report) , Crocs, Inc. (CROX - Free Report) , Boyd Gaming Corporation (BYD - Free Report) , Boise Cascade Company (BCC - Free Report) and TELUS Corporation (TU - Free Report) are worth a look.
While evaluating any company, 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 strong 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.
Nevertheless, sales growth alone doesn’t indicate much about a company’s prospects. Hence, 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 Potential 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 18 stocks that qualified the screening:
W.R. Berkley, based in Greenwich, CT, is one of the nation’s largest commercial lines property casualty insurance providers. WRB offers a variety of insurance services from reinsurance to workers comp third-party administrators.
W.R. Berkley’s expected sales growth rate for 2022 is 15.3%. The stock sports a Zacks Rank #1 at present.
Headquartered in Broomfield, CO, Crocs is one of the leading footwear brands with its focus on comfort and style. Famous for its iconic clog material, CROX’s simple design and great comfort were an instant hit among consumers.
Crocs’ expected sales growth rate for 2022 is 49.8%. The stock currently carries a Zacks Rank #2.
Based in Las Vegas, NV, Boyd Gaming is a multi-jurisdictional gaming company. BYD owns and operates gaming entertainment properties in Nevada, Illinois, Indiana, Iowa, Kansas, Louisiana, Mississippi, Missouri, Ohio and Pennsylvania.
Boyd Gaming’s sales are expected to rise 3.2% for 2022. The stock carries a Zacks Rank #2 at present.
Based in Boise, ID, Boise Cascade manufactures wood products and distributes building materials in the United States and Canada. BCC operates through two segments, Wood Products and Building Materials Distribution.
Boise Cascade’s expected sales growth for 2022 is 9.5%. The company, at present, sports a Zacks Rank #1.
Headquartered in Vancouver, TELUS is one of the largest telecom carriers in Canada (the largest in western Canada), covering 95% of the country’s population.
TELUS’ expected sales growth rate for 2022 is 2.8%. 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