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Zacks.com featured highlights Caleres, Plains All American Pipeline, TravelCenters of America, Green Dot and UFP Industries

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For Immediate Release

Chicago, IL – October 18, 2022 – Stocks in this week’s article are Caleres, Inc. (CAL - Free Report) , Plains All American Pipeline (PAA - Free Report) , TravelCenters of America Inc. , Green Dot (GDOT - Free Report) and UFP Industries (UFPI - Free Report) .

Pick These 5 Low Price-to-Sales Stocks for a Winning Portfolio

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.

Here are five of the 23 stocks that qualified the screening:

Caleres is a leading footwear retailer and wholesaler in the United States, China, Canada and Guam. It operates through Famous Footwear and Brand Portfolio segments. The company offers licensed, branded and private-label athletic, casual and dress footwear products to women, men and children. Famous Footwear offers great casual and athletic brands for the entire family, with convenient, curated and affordable collections.

Caleres’ retail shoe stores provide branded athletic, casual and dress shoes, including Nike, Skechers, adidas, Vans, Converse, Crocs, Puma, Birkenstock, New Balance, Asics, New Balance, Under Armour, Bearpaw, Timberland, Sperry and Dr. Martens. It also provides company-owned and licensed brands, such as Dr. Scholl's Shoes, Blowfish Malibu, LifeStride, Naturalizer, Zodiac, Circus by Sam Edelman, Franco Sarto, and Ryka. CAL currently has a Zacks Rank #2 and a Value Score of A.

Plains All American, a master limited partnership, is involved in the transportation, storage, terminalling and marketing of crude oil, natural gas, natural gas liquids and refined products in the United States and Canada. The partnership operates in the Permian Basin, South Texas/Eagle Ford area, Rocky Mountain and Gulf Coast in the United States, and Manito, South Saskatchewan and Rainbow in Canada.

Plains All American benefits from its widespread Permian operation, cost-saving initiatives, joint ventures and asset divestitures, which will support operations over the long term. PAA’s strong cash flow will help strengthen the balance sheet. PAA currently sports a Zacks Rank #1 and has a Value Score of A.

TravelCenters of America operates travel centers and stand-alone 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.

Green Dot is a pro-consumer bank holding company and personal banking provider. The company offers products and services directly to customers through a large-scale omni-channel national distribution platform. It also allows third-party partners to access its banking and technology assets for offering their financial services directly to consumers via private distribution platforms.

Based in Pasadena, CA, Green Dot continues to improve and scale its operating infrastructure. The company's strategy to expand its addressable market using its banking-as-a-service account programs is appreciable. Accelerated investments in products and platform parts bode well for Green Dot’s business in the mid to long term. The GDOT stock currently has a Value Score of A and a Zacks Rank #2.

Grand Rapids, MI-based UFP Industries is a holding company with subsidiaries throughout North America, Europe, Asia and Australia. The company supplies wood, wood composite and other products in retail, industrial and construction markets. It has been gaining from the diversity of markets, higher organic unit sales, solid contributions from buyouts, product innovation and an improved pricing model. UFP Industries' industrial and construction segments are experiencing favorable growth trends and profitability, given normalized retail demand.

UFP Industries is poised to benefit from a solid U.S. residential market, and more demand for repair and remodeling activities. Also, buyout gains and shareholders' rewards are expected to work in its favor. The UFPI stock has a Value Score of A and it currently sports a Zacks Rank #1.

You can get the rest of the stocks on this list by signing up now for your 2-week free trial to the Research Wizard and start using this screen in your own trading. Further, you can also create your own strategies and test them first before taking the investment plunge.

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 trial to the Research Wizard 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.

For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/1992704/pick-these-5-low-price-to-sales-stocks-for-a-winning-portfolio

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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