price to sales ratio

AGILENT TECHNOLOGIES INC. $30 (New York symbol A; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 346.0 million; Market cap: $10.4 billion; Price-to-sales ratio: 2.3; WSSF Rating: Average) makes testing systems that help improve the quality of electronic products, such as cellphones, set-top boxes and high-speed Internet equipment. The company gets 50% of its revenue from these systems, which it sells to over 30,000 contract manufacturers, as well as research and development labs. It also provides associated services. Agilent recently separated its circuit-board testing operations into a stand-alone division. This business, which accounts for about 5% of Agilent’s revenue, makes equipment that helps its customers find and repair defects in circuit boards....

WEYERHAEUSER CO. $39 (New York symbol WY; Conservative Growth Portfolio, Resources sector; Shares outstanding: 211.4 million; Market cap: $8.2 billion; Price-to-sales ratio: 1.4; WSSF Rating: Extra Risk) is a major North American lumber and paper producer. It owns or leases over 37 million acres of timberland in the U.S. and Canada. Slow housing markets continue to weigh on lumber demand. In the three months ended September 30, 2009, Weyerhaeuser’s revenue fell 33.2%, to $1.4 billion from $2.1 billion a year earlier. Its losses ballooned to $56 million, or $0.26 a share, from $3 million, or $0.01 a share. These figures exclude several non-recurring items, including gains on sales of excess land and operations, writedowns and costs to close sawmills and other facilities. So far, these moves have helped cut the company’s annual expenses by $450 million. Weyerhaeuser is still looking at converting to a real estate investment trust (REIT), which would lower its income taxes. Many of its rivals operate as REITs, and enjoy a tax advantage over the company....

NEWMONT MINING CORP. $55 (New York symbol NEM; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 490.2 million; Market cap: $27.0 billion; Price-to-sales ratio: 4.0; WSSF Rating: Average) is one of the world’s largest gold-mining companies. Newmont has major mines in the U.S., Canada, Australia, New Zealand, Peru and Ghana. It gets about 80% of its revenue from gold. The remaining 20% comes from copper, zinc and other metals. Most of Newmont’s copper comes from the large Batu Hijau gold/copper mining complex in Indonesia. As part of its original 1986 deal to develop Batu Hijau, Newmont and its partners agreed to lower their stakes in the mine, in stages, by selling them to the Indonesian government. As a result, the company recently reduced its stake in Batu Hijau to 31.5% from 45%. In exchange, Newmont received roughly $669 million. The company expects to sell more of its stake in Batu Hijau over the next few months. Meanwhile, Newmont earned $388 million in the three months ended September 30, 2009. That’s 113.2% higher than the $182 million it earned a year earlier. Per-share earnings jumped 97.5%, to $0.79 from $0.40, on more shares outstanding. Cash flow per share gained 94.8%, to $1.85 from $0.95. Revenue climbed 49.5%, to $2.05 billion from $1.4 billion. The gains were mainly caused by higher average gold prices (up 11%), and higher gold sales (up 16%). Newmont also cut its operating costs and benefited from higher copper prices and production....

APACHE CORP. $98 (New York symbol APA; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 336.2 million; Market cap: $32.9 billion; Price-to-sales ratio: 4.1: WSSF Rating: Average) produces oil and natural gas from properties in the U.S., Canada, the U.K., Australia, Egypt and Argentina. The company gets roughly 50% of its production from oil, and 50% from natural gas. This balance has helped shield the company from falling gas prices, which are down over 50% from a year ago. Oil prices, by comparison, are down roughly 35%. Despite the lower prices, Apache increased its daily production to a record 607,118 barrels (including oil and natural gas) in the third quarter of 2009. That’s up 3.4% from the previous quarter, and 19% from a year earlier....

ENCANA CORP. $55 (New York symbol ECA; Conservative Growth Portfolio, Resources sector; Shares outstanding: 751.2 million; Market cap: $41.3 billion; Price-to-sales ratio: 2.1: WSSF Rating: Average) will split itself into two separate companies in December, now that shareholders have approved the plan. Break-ups like this help unlock hidden value, and generally lead to above-average results for a period of years. One company will keep the EnCana name, and will focus on unconventional natural gas. The other will operate as Cenovus Energy Inc. (New York symbol CVE), and will specialize in oil-sands projects, oil refineries and conventional natural gas. The new EnCana will account for about two-thirds of the company’s current production and reserves. Cenovus will account for the remaining third. EnCana will give its shareholders one new common share in each of the two new companies for every EnCana share they own. As well, investors will not have to pay capital-gains taxes until they sell their new shares....

AT&T INC. $27 (New York symbol T; Income Portfolio, Utilities sector; Shares outstanding: 5.9 billion; Market cap: $159.3 billion; Price-to-sales ratio: 1.3; WSSF Rating: Average) sells traditional telephone services to 45.7 million consumer and business customers in 13 states. Its wireless division has 81.6 million customers nationwide. Since 2007, AT&T has been the exclusive U.S. carrier of the hugely popular Apple iPhone. The company attracted a record 3.2 million new iPhone users in the three months ended September 30, 2009. About 40% of these customers were new to AT&T. Despite these new clients, AT&T’s third-quarter revenue fell 1.6%, to $30.9 billion from $31.3 billion a year earlier. Earnings fell 1.2%, to $3.19 billion from $3.23 billion. Earnings per share fell 1.8%, to $0.54 from $0.55, on more shares outstanding....

VERIZON COMMUNICATIONS INC. $32 (New York symbol VZ; Income Portfolio, Utilities sector; Shares outstanding: 2.8 billion; Market cap: $89.6 billion; Price-to-sales ratio: 0.9; WSSF Rating: Average) has 33.4 million phone customers in 28 states. It also has 89 million wireless users. The company is the exclusive carrier of Motorola’s new Droid smartphone, which uses the Android operating system developed by Internet search provider Google. This new phone should help Verizon compete with the iPhone. Meanwhile, Verizon earned $0.60 a share (or a total of $1.7 billion) in the third quarter of 2009. That’s down 9.1% from $0.66 a share (or $1.9 billion) a year earlier. These figures exclude integration and other costs related to Verizon’s January 2009 purchase of rural wireless carrier Alltel Corp. Revenue rose 10.2%, to $27.3 billion from $24.8 billion, mainly because of Alltel....

Agilent was a unit of Hewlett-Packard until 1999, when Hewlett set it up as a separate company and handed it out to its investors as a special dividend or spinoff. The company has since gone through a lot of changes. In 2005, it sold its struggling chip-making operations. In 2006, it spun off Verigy Ltd., its computer-chip-testing business. Meanwhile, it has gone through two major restructurings in the past four years. All this has helped Agilent cut its costs. This will spur its long-term earnings and cut its risk. It is also acquiring a medical-testing products firm to expand in that business, and this helps cut its dependence on the highly cyclical electronics industry. AGILENT TECHNOLOGIES INC. $30 (New York symbol A; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 346.0 million; Market cap: $10.4 billion; Price-to-sales ratio: 2.3; WSSF Rating: Average) makes testing systems that help improve the quality of electronic products, such as cellphones, set-top boxes and high-speed Internet equipment....

HEWLETT-PACKARD CO. $50 (New York symbol HPQ; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 2.4 billion; Market cap: $120.0 billion; Price-to-sales ratio: 1.0; WSSF Rating: Above Average) spun off Agilent in November 1999 as part of a plan to focus on its main computer and printer businesses. The company is expanding its computer-services operations, which help businesses manage their hardware and software needs. These services generate higher profits for Hewlett than selling hardware. As well, long-term servicing contracts give it more predictable revenue streams. Hewlett now gets 46% of its revenue from business services. In August 2008, the company paid $13.9 billion for Electronic Data Systems Corp., a leading supplier of computer services to large government agencies and corporations. Hewlett is also paying $2.7 billion for computer-networking equipment maker 3Com Corp. (Nasdaq symbol COMS). The company expects to close the deal in the first half of next year....

VERIGY LTD. $11 (Nasdaq symbol VRGY; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 58.8 million; Market cap: $646.8 million; Price-to-sales ratio: 1.9; WSSF Rating: Extra Risk) lost $87 million, or $1.49 a share, in the fiscal year ended October 31, 2009. It earned $71 million, or $1.18 a share, in the prior year. These figures exclude writedowns of investments, as well as charges related to an 18% cut that Verigy made to its workforce. The layoffs saved Verigy $120 million in the latest year. Revenue for the year fell 53.3%, to $323 million from $691 million. However, orders rose 17% during the fourth quarter. Verigy expects that its revenue in the current quarter will rise by 8% to 19% over the fourth quarter, as the improving economy prompts chipmakers to spend more on testing equipment. Verigy is a buy.