The Canadian stocks on our list are trading well below the median price to sales ratio
SmallCapPower | June 17, 2019: The Price to Sales Ratio takes a company’s market capitalization and divides it by the company’s total revenues. A lower Price to Sales ratio can indicate a more attractive investment, as it shows that the market places greater value on every dollar of sales. Today we have identified four Canadian stocks that are trading well below the median price to sales ratio of 1.9x amongst our peer group of 1034 Canada-listed stocks.
*Share prices as at close Thursday, June 13, 2019, data obtained from S&P Capital IQ
H2O Innovation Inc. (TSXV:HEO) – $1.24
Industrial Machinery
H2O Innovation is a Quebec-based company that provides integrated water treatment solutions based on membrane filtration technology. HEO serves markets globally, including in Canada, the U.S., Spain, China, Mexico, France, and Egypt. It designs, manufactures, and markets systems and equipment to produce clean drinking water and clean water for industrial processes. In addition to membrane filtration systems, the Company also provides spare parts, such as pumps, valves, membranes, and filters. H2O Innovation has won various awards, including winning the Distinguished Engineering Award in October 2018, and the Water Technology Company of the Year in April 2016.
- Market Cap: $69.3M
- YTD Returns: 33.3%
- Average 90 Day Trading Volume: 20,000
- Price to Sales Ratio: 0.6x
Seven Aces Limited (TSXV:ACES) – $0.79
Casinos and Gaming
Seven Aces Limited owns and operates coin-operated amusement machines in Georgia and is the largest route operator of skill-based gaming machines in the state. The Company’s strategy consists of capitalizing on opportunities to acquire and grow businesses in the gaming, skill gaming, and gaming-related markets. Seven Aces acquires businesses with a proven track record, an opportunity for growth, and whose management wishes to continue to operate the business going forward.
- Market Cap: $55.7M
- YTD Returns: -21.7%
- Average 90 Day Trading Volume: 50,000
- Price to Sales Ratio: 0.6x
Yellow Pages Limited (TSX:Y) – $8.14
Interactive Media and Services
Yellow Pages Limited operates as a digital media and marketing solutions company. It offers a suite of apps, Websites, and print media to suit the search preferences of Canadians. The Company provides digital and traditional marketing solutions, including online and mobile priority placement on Yellow Page media, content syndication, and search engine solutions.
- Market Cap: $228.5M
- YTD Returns: 38.44%
- Average 90 Day Trading Volume: 20,000
- Price to Sales Ratio: 0.4x
Indigo Books & Music Inc (TSX:IDG) – $8.10
Specialty Stores
Indigo Books & Music is a Canada-based book, gift and toy retailer. The Company operates stores in approximately 10 provinces and a territory in Canada and offers online sales through its indigo.ca website. It operates approximately 90 superstores under the banners Chapters and Indigo, and about 120 small format stores under the banners Coles, Indigospirit, SmithBooks and The Book Company. Indigo has interests in Calendar Club of Canada Limited Partnership (Calendar Club), which operates seasonal kiosks and year-round stores in shopping malls across Canada. Its loyalty programs include irewards, which is a fee-based loyalty program, and the plum rewards program, which is a free points-based loyalty program.
- Market Cap: $219.8M
- YTD Returns: -26.3%
- Average 90 Day Trading Volume: 10,000
- Price to Sales Ratio: 0.2x
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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