Zacks.com Featured Highlights Include: Medifast, LCI, Vectrus, Duluth And Patrick
Zacks Investment Research | Mar 20, 2018 10:47PM ET
For Immediate Release
Chicago, IL – March 21, 2018 - Stocks in this week’s article Medifast Inc. (NYSE:MED) , LCI Industries (NYSE:LCII) , Vectrus Inc. (NYSE:VEC) , Duluth Holdings Inc. (NASDAQ:DLTH) and Patrick Industries Inc. (NASDAQ:PATK) .
5 Stocks with Robust Sales Growth to Add to Your Portfolio
When it comes to choosing stocks, investors often opt for complex investment strategies in a bid to book higher returns. But with ever changing market dynamics, this may not yield the desired results every time. Therefore, using conventional strategies, based on key fundamentals, to choose stocks is always a wise decision.
One such strategy is sales growth. Maintaining steady sales growth is the key to survival for any business. Sales growth as such remains a vital measure for any corporate house, as it is important to growth projections and strategic decision making.
So, when companies incur losses for a temporary period, they are valued based on their revenues, as top-line growth (or decline) is usually an indicator of a company’s future earnings performance. Also, in contrast to price to earnings and price to book value ratios, which can turn negative and cease to be relevant, price-to-sales (P/S) ratio is available even for companies that have hit choppy waters.
Additionally, profits and book value are largely influenced by several factors including accounting decisions tied with depreciation, significant charges and inventory. However, management has limited opportunities to manipulate sales, which further underscores the importance of P/S ratio.
Hence, P/S ratio can serve as a more reliable metric for stock valuation. Focusing solely on sales growth is, however, not enough.
A consideration of a company’s cash position along with its sales can be a more dependable strategy. Significant cash in hand and steady cash flow give 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: Zacks Investment Research
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