That has to be encouraging news to stock market bulls, since Mr. Seyhun has found the market has tended to perform well when his adjusted ratio of insider sales to purchases is low.
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The O'Shaughnessy strategy likes that Hasbro's earnings per share have increased in each of the past five years, its price-to-sales ratio of 1.44 is below the 1.5 maximum allowed, and its relative strength is strong at 84.
Currently, NVTL has a price-to-sales ratio of 1.9, below the industry average of 2.8.
Freeport McMoRan trades at a discount to its 3-year average price-to-sales ratio of 2.218.
Again, its price-to-sales ratio of 4.26 is at a premium to the peer group average of 0.70.
Say the company has a price-to-sales ratio of 0.7 while its peers have higher ratios of, say, 2.
Similarly, with a price-to-sales ratio of 2.61x, the stock looks rather undervalued compared to the historically normal range of 3.43x to 10.44x.
Similarly, the current price-to-sales ratio of .49x is equal to the low end of its range established over the last ten years (.49x to .72x).
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After all, its ratio of operating margins to consolidated sales rose from 2.7% to 3.2%.
The ratio of common market capitalization to sales, at 1.8, is well below the long-run average of 2.6.
Another subsample of data from 251 stores within 31 retail chains provided information about the ratio of cash shortage to store sales.
Coupled with high relative strength in the previous twelve months, a low price-to-sales ratio is one of the most potent combinations of investment criteria.
The shares trade at a PE ratio of about 14 and more than twice sales, just as it reported a worrisome drop in sales of big-ticket items, like mainframe computers, and some slowing of software sales.
Colgate has an impressive cash conversion ratio (free cash flows as a % of sales) of close to 14%.
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Today about a third of industry sales is outsourced, a ratio that will continue to rise, he predicts.
Maybe Mr. Weiss is aware that American Greetings trades well below its average price-to-sales ratio for the past three years of 0.48.
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As of June, the inventory-sales ratio for retailers had returned to its downtrend, but was still above trend for wholesalers and, especially, manufacturers.
If the company can turn things around, its shares will enjoy substantial upside as the price-to-sales ratio becomes more closely matched with those of its peers.
Moreover, most analysts compute the simple price-rent ratio by comparing the prices of current for-sale listings or recent sales to the prices of current rental listings.
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My favorite new measurement of success in inside sales and web marketing is the contacted ratio.
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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.
My buddy who owns a string of McDonald's restaurants notes that credit card sales account for 16% of store volume, an unusually high ratio.
For example, Fidelity national trades for 0.72 times sales, 1.85 times book value and at a price-to-earnings growth ratio of 0.91.
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