Of the many tools that investors can use to evaluate which stocks look favorable to buy, a key one is the Price to Sales Ratio or PSR Ratio. It is also called the P/S ratio or the “King of the Value Factors.” If a low P/S value is shown on a stock then it can indicate a higher potential for profit if the stock bounces back. Some investors look for P/S ratios that are much lower than 1.
In general, the lower the Price to Sales Ratio, the better the value of the related stock. Given this reasoning, these three stocks look favorable to buy: Vishay Intertechnology (NYSE:VSH), Wabash National Corporation (NYSE:WNC) and GrafTech International Ltd (NYSE:GTI).
Vishay Intertechnology (NYSE:VSH) has a closing price of $10.78, with its Price to Sales Ratio sitting at 0.56. That is underneath the average in the industry, which is 1.79. Looking back over the last five years, the sales for the company has shot up 88.80% per year, typically. Its income has improved, generally, by a rage of 92.50%.
The next stock that looks to be attractive is Wabash National Corporation (NYSE:WNC). It has a P/S ratio that is 0.46%, which is a lot under the 1.32 industry average. Looking back 5 years, one can see that the growth for the company has been above 43.50% every year, typically. The earnings per share of this company have improved steadily by about 54.30%.
GrafTech International Ltd (NYSE:GTI) is the third stock for buying consideration, considering its low Price to Sales ratio. It has a share price, as of last trade, of 5.05 per share. That price has grown 9.60% over this year of 2015 alone. The P/S ratio is 0.48 currently, which is below the industry average; the average is 3.69. That is a large number underneath the average. Over the last five years, one can determine that earnings were about 30.90% per year and the typical decline for the company has been at a rate of 6.70%.
These three above-noted stocks have low Price to Sales ratio, making them prime ones for buyers to consider now.