Zacks.com featured expert Kevin Matras highlights: Green Plains Renewable Energy, Inc., Kirkland's Inc., Spirit AeroSystems Holdings, Inc., Tower International, Inc. and ValueVision Media Inc.
CHICAGO, July 17, 2013 /PRNewswire/ -- Stocks in this week's article include: Green Plains Renewable Energy, Inc. (NASDAQ: GPRE – Free Report), Kirkland's Inc. (NASDAQ: KIRK – Free Report), Spirit AeroSystems Holdings, Inc. (NYSE: SPR – Free Report), Tower International, Inc. (NYSE: TOWR – Free Report) and ValueVision Media Inc. (NASDAQ: VVTV – Free Report). This week, Kevin Matras shows how to use the Price to Sales ratio.
Screen of the Week written by Kevin Matras of Zacks Investment Research: This week, I'm going to focus on the Price to Sales ratio for finding great stocks at great values.
The Price to Sales ratio is simply: Price divided by Sales
One of the reasons I like the Price to Sales ratio is because it looks at sales rather than earnings like the P/E ratio does. Sales are harder to manipulate on an income statement than earnings.
Secondly, I'd be hard pressed to find a screen where adding the Price to Sales ratio didn't improve it.
For me, I prefer to look for stocks with a Price to Sales ratio under 1. Although, I'm willing to go up to 4, depending on the industry. But the best way to use it, I've found, is to find stocks with a Price to Sales ratio below the median for its Industry.
And that's what we'll be focusing on in this week's screen.
For the rest of this Screen of the Week article please visit Zacks.com at: http://www.zacks.com/commentary/28149/
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