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09:46PM (15 mins delay)
Mar 26, 2009 - 11:31 AM EDT
John Reese submits:Price-to-Sales ratio ((PSR)) is a measure used by many of the Guru Strategies I run on Validea.com as a way to find undervalued stocks. The ratio, which is simply the market capitalization of the firm divided by the company’s sales, has become more popular over the years as investors look for additional ways to uncover value among publicly traded stocks.
The individual who popularized the PSR is Ken Fisher. Fisher, a longtime Forbes magazine columnist, is one of the most widely recognized names in the money management business. His firm, Fisher Investments, manages tens of billions of dollars. In his 1984 book Super Stocks, Fisher outlined an investment approach using the PSR – this is the approach I utilize in the computerized Price/Sales Investor strategy on Validea.com.
Source: Seeking Alpha (Mar 26, 2009 - 11:31 AM EDT)
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