Global growth looks pretty interesting also, particularly when we look at metrics like price to sales.
Price to book and price to sales multiples for LTM are pretty much in line with the industry averages.
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But its shares are trading well off its peak price to sales ratio.
The intoxicating metric is the price to sales, with the company trading at 1.8x compared to a 3.2x industry average.
As for stocks, I look for those with low price to sales, low price to earnings, low price to book, etc.
Price to book of 5x is well above the 3.6x industry average while the price to sales multiple of 0.7x is slightly below the 1x industry average.
In addition, ratios of price to sales and price to book value are bumping along their lowest levels of the past four years and are at substantial discounts to their five-year averages.
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Use multiple valuation metrics--not just the ratio of price-to-earnings but the ratios of price-to-sales and price-to-book.
The stock also looks relatively less expensive according to the price-to-sales, price-to-cash flow (in the sense of net income plus depreciation) and enterprise multiples.
All things being equal, a low price-to-sales ratio is good news for investors, while a very high price-to-sales ratio can be a warning sign.
Furthermore, on a price-to-sales basis over the last ten years, CA has normally traded for 2.53x to 4.03x, but the current price-to-sales (fiscal 2010) is only 2.47x.
The price-to-sales metric of 0.43x at the bid price does not fall below the historical range of price-to-sales, but it is near the low end of the range of 0.37x to 0.72x.
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On a price-to-sales and price-to-book basis as well, the stock is trading at premiums to industry averages.
The stock does trade on the low side of its historically normal ranges of price-to-sales and price-to-cash earnings.
Ardour Capital's Nasdeo says other traditional metrics, such as price-to-sales or price-to-book value, are not really much help either.
The stock is trading within its historically normal ranges of both price-to-sales and price-to-cash earnings, so there is nothing particularly intriguing from a historical valuation standpoint.
At Ockham, we currently have a Fairly Valued or neutral rating on JEF, as it traded within its historically normal range of price-to-sales and price-to-cash earnings as of our report to start the week.
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Privately held companies, for whom in most cases only 2004 data were readily available, were valued based on comparisons to prevailing price-to-earnings or price-to-sales ratios for similar publicly traded companies.
The stock trades near the low end of both its historical price-to-cash earnings and price-to-sales ranges.
The stock has traded below its historically normal levels of price-to-cash earnings and price-to-sales during this time.
The current price-to-cash earnings and price-to-sales valuation metrics are sitting comfortably within the historically normal valuation for this stock.
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The stock currently trades above its historically normal price-to-cash earnings and price-to-sales levels.
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Cisco trades near the low end of both their historical price-to-cash earnings and price-to-sales ranges, which suggests the valuation is favorable.
PetSmart is trading within its historically normal price-to-cash earnings and price-to-sales ranges as the market has finally rewarded PETM for its steady growth.
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With the stock trading just below the low levels of historical price-to-cash earnings and price-to-sales ranges, we continue to believe the stock is Undervalued.
However, both price-to-cash earnings and price-to-sales are currently sitting within the historically normal valuation levels, so it is sending neither an Undervalued nor an Overvalued signal.
The stock is very near the high end of its historically normal ranges of both price-to-cash earnings and price-to-sales, which suggests the market has already priced in quite a bit of fundamental improvement.
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