Zacks.com Featured Highlights Include: Oaktree Capital, Synopsys, Starbucks, Stryker And Ares Capital
Zacks Investment Research | Mar 07, 2019 10:20PM ET
For Immediate Release
Chicago, IL – March 8, 2019 - Stocks in this week’s article are Oaktree Capital Group, LLC (NYSE:OAK) , Synopsys, Inc. (NASDAQ:SNPS) , Starbucks Corp. (NASDAQ:SBUX) , Stryker Corp. (NYSE:SYK) and Ares Capital Corp. (NASDAQ:ARCC) .
Impressive Sales Growth Makes These 5 Stocks Worth Buying
A healthy business with steady sales growth is key to survival in today’s fast changing and highly competitive business environment. As such, higher revenues are necessary to drive growth, and most companies look for a strong relationship between sales growth levels and the value of an enterprise.
Though a company might not be profitable over a particular period, it usually generates revenues unless there are unforeseen situations. In cases when companies tend to incur a loss on a temporary basis, they are valued based on sales. This is because sales growth (or decline) is usually an early indicator of the company’s future earnings performance.
The Price-to-Sales (P/S) ratio takes into account a company’s revenues when valuing it. It is key stock selection criteria keeping in mind that management usually has limited opportunities to manipulate sales numbers as they can with earnings.
While sales growth is an important metric for any corporate for the purpose of growth projections and strategic decision-making, this in isolation doesn’t indicate much about a company’s future performance. Though it provides investors an insight into product demand and pricing power, a huge sales number does not necessarily convert into profits.
So, consideration of a company’s cash position along with its sales number can be a more dependable strategy. Substantial cash in hand and a steady cash flow give a company more flexibility with respect to business decisions and further potential investments. Also, an adequate cash position suggests that revenues are being channelized in the right direction.
For the rest of this Screen of the Week article please visit Zacks.com at: Zacks Investment Research
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