The Price to Sales Ratio, or PS Ratio, is a popular valuation ratio. It is the share price of a company divided by its sales per share. This is measured on a TTM basis and earnings are diluted and normalised.
Some argue that, since sales figures are less easy to manipulate than either earnings or book value, the price-to-sales ratio is a more reliable indicator of company value.
When EPS are negative or depressed temporarily the Price to Sales ratio can be a more useful indicator than the PE Ratio, and a low P/S can indicate a higher profit potential if the stock recovers.
Some commentators have called it 'The King of the Value Factors' and look for P/S ratios of significantly less than 1.
It should be noted that the P/S ratio was abused during the dot com years to promote companies with no earnings or profits.
This is measured on a TTM basis and earnings are diluted and normalised.
Ticker | Name | P / S | StockRank™ |
---|---|---|---|
LON:KZG | Kazera Global | -811.01 | 39 |
LON:FSFL | Foresight Solar Fund | -560.67 | 90 |
LON:FWT | Foresight Technology VCT | -416.09 | 0 |
LON:HFEL | Henderson Far East Income | -319.07 | 85 |
LON:NAIT | North American Income Trust | -257.21 | 0 |