Screen Potential Candidate EP I

Price-to-Sales for Large-Cap Stocks

“The price-to-sales ratio is the king of all the value factors.” This individual value ratio has been the best performer throughout history. In fact, research shows that using this one criterion helped investors beat the markets more than with any other value ratio, and did so more consistently.

The Large-Cap Price-to-Sales screen will provide you with an excellent list of value stocks that can be combined with other ideas. For the most part, the outcome of the query will reveal those companies that have a high level of sales but have not seen their stock price appreciate commensurately.

The implication is that stocks here have lower downside potential, as they have a respectable stream of revenue that may eventually be rewarded. This is a far cry from those growth stocks with high prices and low sales. While the upside for those is great, the downside is usually even greater.

Criteria We Used:

1. Must be stocks in S&P 500 Index.
2. Market Cap larger than 2 billions or the bigger the better.
3. P/S Ratio as low as possible

While simple, the results may provide you with an interesting list of candidates to think about researching further. Most of the results will represent value-oriented stocks by the very nature of the criteria used. Some, on the other hand, may actually be “diamonds in the rough.”