Whether you are new to investing or a seasoned pro, you have to understand Price to Sales Ratio or P/S ratio. It is a measure of the current stock price relative to the total number of sales per share. The formula for the Price to Sales Ratio is calculated by taking the sales per share and dividing it by the current stock price. If a stock has a low P/S ratio then that means it has a better value. There are the details of three low stocks in terms of current Price to Sales Ratio: E-House (China) Holdings (NYSE:EJ), Bill Barrett Corporation (NYSE:BBG), Centurylink (NYSE:CTL).
The E-House (China) Holdings (NYSE:EJ) stock is in significant decline as of its last close. It was last traded at $6.16 per share. At this point in 2015, the stock is down -12.13%. Its P/S ratio is 0.96, while the average for the industry is at 6.10; that is obviously quite lower. Over the past five years, the earnings per year for this stock were about 24.70%. A fall of -26.50% is reported as the average decline rate for the net income of the company.
Bill Barrett Corporation (NYSE:BBG) has a Price to Sales Ratio of 0.88%, as of last close. Its price per share, also a statistic from last close, was $6.92 per share. Speaking again of its 0.88% P/S Ratio, it was below the industry average, which is 2.24. For an entire year’s sales, the company is at -6.30% a year (average) and company’s earnings per share is down by a rate, on average, of -22.70%.
As for Centurylink (NYSE:CTL), its Price to Sales Ratio is a 0.92, which is much lower than the industry average of 4.19. The sales for the company, if one looks over the period of the last five years, rose by 29.40% a year (average), although the net income for the company Centurylink fell by a rate that was -11.80%.
