Zacks.com featured highlights: Universal Forest Products, United Natural Foods, Greenbrier Companies, Avnet, Xcerra, Citizens Financial and Sonoco Products

For Immediate Release

Chicago, IL – November 1, 2017 - Stocks in this week’s article Universal Forest Products Inc. UFPI, United Natural Foods, Inc. UNFI, The Greenbrier Companies, Inc. GBX, Avnet, Inc. AVT, Xcerra Corporation XCRA, Citizens Financial Group Inc. CFG and Sonoco Products Company SON.

Screen of the Week by Zacks Investment Research:

Low Price-to-Sales Stocks to Buy for Solid Returns

A stock’s Price-to-Sales ratio reflects how much investors are paying for each dollar of revenues generated by the company.

If the Price-to-Sales ratio is 1, it means that investors are paying $1 for every $1 of revenues generated by the company. So it goes without saying that a stock with 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 more suitable for investment versus a stock with a high Price-to-Sales ratio.

Though Price-to-Earnings is the first thing to cross one’s mind while using valuation metrics, Price-to-Sales has emerged as a convenient tool to determine the value of stocks that are incurring losses or are in an early cycle of development, generating meager or no profits.

While a loss-making company with a negative Price-to-Earnings ratio falls out of investor favor, its Price-to-Sales could indicate the hidden strength of its business. This underrated ratio is also used to identify a recovery situation or ensure that a company's growth is not overvalued.

Price-to-Sales 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 high debt and low Price-to-Sales is not an ideal choice. The high debt level will have to be paid off at some point, leading to further share issuance and a rise in market cap and ultimately a higher Price-to-Sales ratio.

In any case, the Price-to-Sales ratio used in isolation can’t do the trick. One should also analyze other ratios like Price/Earnings, Price/Book and Debt/Equity before arriving at any investment decision.

For the rest of this Screen of the Week article please visit Zacks.com at:https://www.zacks.com/stock/news/280982/7-low-pricetosales-stocks-to-buy-for-solid-returns

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Greenbrier Companies, Inc. (The) (GBX) : Free Stock Analysis Report
 
Universal Forest Products, Inc. (UFPI) : Free Stock Analysis Report
 
Sonoco Products Company (SON) : Free Stock Analysis Report
 
Avnet, Inc. (AVT) : Free Stock Analysis Report
 
Citizens Financial Group, Inc. (CFG) : Free Stock Analysis Report
 
United Natural Foods, Inc. (UNFI) : Free Stock Analysis Report
 
Xcerra Corporation (XCRA) : Free Stock Analysis Report
 
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