Yahoo Finance Zacks.com featured highlights include Lakeland ODP, ProPetro, Barrett Business and JAKKS
For Immediate Release
Chicago, IL – May 23, 2024 – Stocks in this week’s article are Lakeland Industries LAKE, The ODP Corp. ODP, ProPetro Holding Corp. PUMP, Barrett Business Services BBSI and JAKKS Pacific JAKK.
5 Low Price-to-Sales Stocks to Make a Profitable Portfolio
Investment in stocks after analyzing 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 development cycle, generating meager or no profit.
What’s the Price-to-Sales Ratio?
While a loss-making company with a negative price-to-earnings ratio falls out of investor favor, its price-to-sales can indicate the hidden strength of the business. This underrated ratio is also used to identify a recovery situation or ensure 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. 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 a 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 analyze other ratios like Price/Earnings, Price/Book and Debt/Equity before arriving at any investment decision.
Lakeland Industries,The ODP Corp., ProPetro Holding Corp. , Barrett Business Services and JAKKS Pacific are some companies with a low price-to-sales ratio and the potential to offer higher returns.
Here are five of the 17 stocks that qualified the screening:
Lakeland Industries operates as a leading global manufacturer of protective clothing for industry, healthcare and first responders on the federal, state and local levels. LAKE's focus on high-value products and market diversification, particularly in the fire service and industrial product lines, has been aiding its performance.
The company has been committed to its strategic acquisition pipeline and is focused on organic growth for the remainder of fiscal 2024. LAKE has a Value Score of A and currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
ODP Corp is a provider of business services, products and digital workplace technology solutions to businesses and consumers. The company is on track with Project CORE, its business optimization initiative that facilitates enhancing its position to continue delivering shareholder value. The powerful combination of the company’s business unit structure and approach to operational excellence are likely to drive efficiencies in its business, creating greater flexibility while navigating challenging macroeconomic conditions.
ODP stands to gain from the momentum in the supply-chain business, driven by its focus on expanding market presence and continued traction with new third-party customers. ODP Corp currently has a Value Score of A and a Zacks Rank #2.
Midland, TX-based ProPetro is an oilfield service provider operating primarily in the Permian Basin spread over west Texas and New Mexico. The company focuses on growth through a combination of acquisitions and pressure pumping services in the lucrative Permian Basin. Its purchase of Pioneer Natural Resources assets has significantly boosted its fleet size. The deal's 10-year dedicated service agreement should ensure a stable revenue base in the medium to long term.
ProPetro, through its leverage to the Permian Basin, is likely to benefit from this multi-year upcycle by providing hydraulic fracturing and other well-completion services to the E&P firms. The company’s strong relationships with high-quality customers provide revenue visibility and business certainty. It is also set to benefit from a debt-light balance sheet, which provides a potential lifeline amid a challenging operating environment. PUMP currently has a Zacks Rank #2 and a Value Score of A.
Barrett provides business management solutions for small and mid-sized companies in the United States. The company has developed a management platform that integrates a knowledge-based approach from the management consulting industry with tools from the human resource outsourcing industry.
The company has been gaining from an expanding client base and the ongoing rollout of BBSI Benefits. Additionally, Barrett has been witnessing positive results in its pricing and cost-management strategies, leading to strong, sustainable earnings growth. BBSI currently has a Value Score of A and a Zacks Rank #2.
Based in Malibu, CA, JAKKS Pacific is a multi-brand company that has been designing and marketing a broad range of toys and consumer products. The company is benefiting from the FOB business model, strategic acquisitions, a solid international footprint, a focus on innovation, and collaborations with popular brands and movie franchisees. The emphasis on the expansion of retail reach bodes well.
JAKK has emerged as a diversified consumer products company, buoyed by a string of acquisitions over the past several years. The company realized the importance of online retailing and shifted its focus to boosting online sales. JAKK has a Value Score of A and currently flaunts a Zacks Rank #1.
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For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/2277325/5-low-price-to-sales-stocks-to-make-a-profitable-portfolio
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The ODP Corporation (ODP) : Free Stock Analysis Report
JAKKS Pacific, Inc. (JAKK) : Free Stock Analysis Report
Barrett Business Services, Inc. (BBSI) : Free Stock Analysis Report
Lakeland Industries, Inc. (LAKE) : Free Stock Analysis Report
ProPetro Holding Corp. (PUMP) : Free Stock Analysis Report
