5 Bargain Stocks With Low P/S Ratios & High Growth Return Potential

Core Insights - Investing in stocks based on valuation metrics, particularly the price-to-earnings (P/E) and price-to-sales (P/S) ratios, is a strategic approach to identify potential investment opportunities [1][3] - The P/S ratio is especially useful for evaluating unprofitable companies or those in early growth stages, as it reflects the value of revenue generated [3][9] Price-to-Sales Ratio - A P/S ratio below 1 indicates that investors are paying less than a dollar for each dollar of revenue, making it a favorable investment [4] - The P/S ratio is preferred over the P/E ratio because sales figures are less susceptible to manipulation compared to earnings [5] - It is important to analyze the P/S ratio in conjunction with other financial metrics such as P/E, price-to-book, and debt-to-equity ratios before making investment decisions [6] Screening Parameters - Companies with a P/S ratio less than the median for their industry are considered better investments [7] - Additional screening parameters include a P/E ratio below the industry median, a price-to-book ratio below the industry median, and a debt-to-equity ratio below the industry median [8] Company Highlights - JAKKS Pacific (JAKK): A multi-brand company benefiting from acquisitions and a strong international presence, focusing on online retailing and digital experiences. It has a Zacks Rank of 1 and a Value Score of A [10][11] - Green Dot (GDOT): A leader in prepaid cards and Banking-as-a-Service, with a strong balance sheet and low debt. It has a Zacks Rank of 1 and a Value Score of A [12][13] - Signet Jewelers (SIG): A leading retailer of diamond jewelry, demonstrating strength in bridal and fashion segments, with effective inventory management and cost-saving initiatives. It has a Zacks Rank of 2 and a Value Score of A [14][15] - Gibraltar Industries (ROCK): Focused on operational improvements and benefiting from high demand in agricultural facilities. It has a Zacks Rank of 2 and a Value Score of A [16][17] - Pfizer (PFE): A major pharmaceutical company expecting growth in non-COVID operational revenue driven by new product launches and acquisitions. It has a Zacks Rank of 2 and a Value Score of A [18][19]