For Immediate Release
Chicago, IL – January 28, 2020 – Stocks in this week’s article are Williams-Sonoma, Inc.
WSM, SS&C Technologies Holdings, Inc. SSNC, Teradyne, Inc. ( TER Quick Quote TER - Free Report) , First Horizon National Corp. FHN and Ares Capital Corp. ARCC. Buy These 5 Top-Ranked Stocks with Robust Sales Growth
Investors often fail to consider sales growth as a dependable metric when it comes to selecting stocks. This might be because of their preconceived notion that a company’s stock price is typically sensitive to its earnings momentum. However, betting on stocks based on such a perception may not prove worthwhile.
It’s worth keeping in mind that in cases when companies incur a loss, although briefly, they are valued on their revenues not earnings, as top-line growth (or decline) is usually an indicator of a company’s future earnings performance.
Further, in contrast with price to earnings and price to book ratios, which can turn negative and cease to be relevant, the price-to-sales (P/S) ratio is available even for firms that have hit choppy waters.
Also, a company can improve earnings by resorting to cost control measures while maintaining stable revenues. However, superior profits could be achieved through continued revenue growth.
Further, earnings and book value are largely influenced by several factors. However, management has limited opportunities to manipulate sales, which further underscores the importance of P/S ratio.
A huge sales number does not necessarily convert into profits. Hence, considering a company’s cash position along with its sales number can prove to be more prudent. 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/734458/buy-these-5-topranked-stocks-with-robust-sales-growth 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
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