price to sales ratio

FEDEX CORP. $43 (New York symbol FDX; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 311.4 million; Market cap: $13.4 billion; Price-to-sales ratio: 0.4; WSSF Rating: Average) delivers packages and documents in the United States and over 220 other countries. In its third fiscal quarter, which ended February 28, 2009, FedEx’s earnings fell 75.3%, to $97 million, or $0.31 a share, from $393 million, or $1.26 a share, a year earlier. Revenue fell 13.8%, to $8.1 billion from $9.4 billion. Because of the recession, many of FedEx’s customers are shipping fewer packages. Moreover, many are switching from overnight to longer deliveries to save money. FedEx plans to cut an undisclosed number of jobs, and lower salaries and work hours. These actions will cost it $100 million. But, together with an earlier round of job cuts, they should lower the company’s costs by $1 billion in fiscal 2010....

ARKANSAS BEST CORP. $20 (Nasdaq symbol ABFS; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 25.3 million; Market cap: $506 million; Price-to-sales ratio: 0.3; WSSF Rating: Average) specializes in “less-than-truckload” shipping. This involves loading freight from a number of customers onto a single truck. Arkansas Best carries a wide range of goods, from food and textiles to clothing and furniture. As the economy began to slow in 2008, Arkansas Best decided to maintain its rates. It felt that its strong reputation would help it hang on to its customers. However, freight volumes fell 15% in the fourth quarter, and the company had to lower its rates in order to to stay competitive. In 2008, Arkansas Best’s earnings dropped 48.7%, to $29.2 million, or $1.15 a share, from $56.8 million, or $2.26 a share, a year earlier. Revenue fell 0.2%, to $1.83 billion from $1.84 billion. In response, Arkansas Best is cutting up to 8% of its workforce. It has frozen salaries, shrunk its fleet and closed some distribution facilities....

The recession has lowered shipping volumes at Arkansas Best and FedEx. However, both are aggressively cutting their costs, which should help them stay profitable. Lower fuel prices will also help them cope. Moreover, their low debt and large cash reserves give them long-term appeal. ARKANSAS BEST CORP. $20 (Nasdaq symbol ABFS; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 25.3 million; Market cap: $506 million; Price-to-sales ratio: 0.3; WSSF Rating: Average) specializes in “less-than-truckload” shipping. This involves loading freight from a number of customers onto a single truck. Arkansas Best carries a wide range of goods, from food and textiles to clothing and furniture. As the economy began to slow in 2008, Arkansas Best decided to maintain its rates. It felt that its strong reputation would help it hang on to its customers. However, freight volumes fell 15% in the fourth quarter, and the company had to lower its rates in order to to stay competitive....

NORDSTROM INC. $16 (New York symbol JWN; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 215.4 million; Market cap: $3.4 billion; Price-to-sales ratio: 0.4; WSSF Rating: Average) operates 169 department stores that cater mainly to upscale shoppers. Last month, its same-store sales fell 15.4% compared to February 2008. In response, the company has scaled back its expansion plans and tightened its credit-card policies. Nordstrom has also brought in more lower-priced merchandise, which should lift its sales. Nordstrom’s reputation for good customer service and its loyal customer base should help it cope with the recession. The stock trades at 13.4 times its probable 2009 earnings of $1.18 a share. The $0.64 dividend still appears secure, and yields 4.0%. Nordstrom is a buy.

IDEXX LABORATORIES INC. $36 (Nasdaq symbol IDXX; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 59.1 million; Market cap: $2.1 billion; Price-to-sales ratio: 2.2; WSSF Rating: Average) makes equipment that veterinarians use to detect diseases in animals. Idexx also makes systems that detect contaminants in water and milk. Idexx spends roughly 7% of its revenue on research, which hurts its profits. But this spending gives it plenty of new products to spur sales. Last year, Idexx launched new versions of its two top-selling systems: Catalyst Dx (which analyzes blood and urine), and SNAPshot Dx (which tests for thyroid and liver disorders). Thanks to strong demand for these new products, Idexx’s sales rose 11%, to $1 billion in 2008 from $922.6 million in the previous year. Earnings before several one-time items (mainly the sale of part of its animal drug business) rose 16%, to $118.3 million from $102 million. Earnings per share rose 20.3%, to $1.90 from $1.58 on fewer shares outstanding. Idexx ended 2008 with cash of $78.9 million, or $1.33 a share. Its long-term debt is just $5.1 million....

PETSMART INC. $21 (Nasdaq symbol PETM; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 127.1 million; Market cap: $2.7 billion; Price-to-sales ratio: 0.5; WSSF Rating: Above Average) sells pet food and supplies through 1,112 stores in the U.S. and Canada. PetSmart opened 112 new stores in its latest fiscal year, which ended February 1, 2009. It also opened 45 new in-store PetHotels, which look after pets while their owners are out of town. PetSmart now has 142 PetHotels. As a result of the expansion, sales rose 8.4%, to $5.1 billion from $4.7 billion in the previous year. Same-store sales rose 3.8%. PetSmart’s earnings fell 25.5%, to $192.7 million from $258.7 million. Its earnings per share fell 22.1%, to $1.52 from $1.95 on fewer shares outstanding. However, the prior year included a $95.4-million gain on the sale of an investment. If you disregard this, per-share earnings actually rose 4.1%....

PetSmart and Idexx reported higher earnings and sales for 2008. The recession could prompt people to spend less on their pets this year. Still, both companies are in a good position to profit when the economy picks up. PETSMART INC. $21 (Nasdaq symbol PETM; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 127.1 million; Market cap: $2.7 billion; Price-to-sales ratio: 0.5; WSSF Rating: Above Average) sells pet food and supplies through 1,112 stores in the U.S. and Canada. PetSmart opened 112 new stores in its latest fiscal year, which ended February 1, 2009. It also opened 45 new in-store PetHotels, which look after pets while their owners are out of town. PetSmart now has 142 PetHotels. As a result of the expansion, sales rose 8.4%, to $5.1 billion from $4.7 billion in the previous year. Same-store sales rose 3.8%....

GENERAL MILLS INC. $50 (New York symbol GIS; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 329 million; Market cap: $16.5 billion; Price-to-sales ratio: 1.2; WSSF Rating: Above Average) earned $0.79 a share in its third fiscal quarter, which ended February 22, 2009. This is down 9.2% from $0.87 a year earlier. (These figures exclude writedowns of certain commodity-trading contracts and other unusual items.) The drop was largely caused by higher costs for the ingredients General Mills uses to make its cereals and other foods. These costs should fall over the next few months. Sales rose 3.9%, to $3.5 billion from $3.4 billion. General Mills expects to earn $3.88 a share in fiscal 2009. The stock trades at 12.9 times this estimate. That’s reasonable in view of its top brands and rising demand for eat-at-home meals. General Mills is a buy.

SONY CORP. ADRs $22 (New York symbol SNE; Conservative Growth Portfolio, Manufacturing & Industry sector; ADRs outstanding: 1 billion; Market cap: $22 billion; Price-to-sales ratio: 0.3; WSSF Rating: Above Average) has struck a new alliance with Internet search engine Google. Sony hopes the new arrangement will spur sales of its Sony Reader electronic book device. Over the past few years, Google has converted several million books into electronic form. Under this new deal, users of the Sony Reader can download titles from Google for free, but only books whose copyrights have expired. Still, that’s over 500,000 titles. This deal should help Sony’s device compete with the popular Kindle book reader from online bookseller Amazon.com. Sony is a buy. FAIR ISAAC CORP. $14 (New York symbol FIC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 48.8 million; Market cap: $683.2 million; Price-to-sales ratio: 0.9; WSSF Rating: Average) is changing its corporate identity to FICO. (FICO is an acronym for Fair Isaac Corp.) Fair Isaac is still the company’s legal name, but it will now be known as FICO. Its ticker symbol is unchanged....

XEROX CORP. $4.88 (New York symbol XRX; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 864.8 million; Market cap: $4.2 billion; Price-to-sales ratio: 0.2; WSSF Rating: Average) cut its workforce by 5% last year because of slowing sales of its copiers and printers. This reduction should lower its expenses by $250 million a year. If you exclude severance and other charges, Xerox earned $985 million, or $1.10 a share, in 2008. Xerox’s sales fell 19% in the first two months of 2009. In response, it’s planning a new round of cost cuts, including freezing salaries. This new plan will save Xerox an additional $300 million. Xerox is still a leader in its field, and its products help businesses cut their expenses by reducing their paper use and streamlining information flows. However, the stock will likely make little progress until the recession ends....