price to sales ratio

MCKESSON CORP. $157 (New York symbol MCK; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 229.0 million; Market cap: $36.0 billion; Price-to-sales ratio: 0.2; Dividend yield: 0.7%; TSINetwork Rating: Above Average; www.mckesson .com) is buying the Rexall chain of 470 drug stores in Canada for $2.2 billion. The company expects to complete the purchase by the end of 2016. McKesson already distributes prescription drugs and other products to Rexall, and this familiarity helps cut the risk of an unpleasant surprise. Excluding integration charges and currency exchange rates, the company expects the new operations will add to its earnings in the first year. McKesson is a hold.

APACHE CORP. $50 (New York symbol APA; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 378.3 million; Market cap: $18.9 billion; Price-to-sales ratio: 3.0; Dividend yield: 2.0%; TSINetwork Rating: Average; www.apachecorp.com) continues to sell overseas properties to focus on its less-risky onshore oil and gas operations here in North America. As a result, its production in 2015 fell 9.9%, to 486,775 barrels a day from 540,212 in 2014. Due to lower oil and gas prices, it lost $130 million, or $0.34 a share, in 2015 compared to a profit of $2.0 billion, or $5.21. The company plans to spend $1.4 billion to $1.8 billion on capital projects in 2016, down from $4.7 billion in 2015. That should let it continue to pay quarterly dividends of $0.25 a share, for an annualized yield of 2.0%. In 2015, dividend payments totaled $377 million....

DIAGEO PLC ADRs $107 (New York symbol DEO; Conservative Growth Portfolio, Consumer sector; ADRs outstanding: 630.0 million; Market cap: $67.4 billion; Price-to-sales ratio: 4.4; Dividend yield: 3.2%; TSINetwork Rating: Above Average; www.diageo.com) is the world’s largest premium alcoholic beverage company. Its major brands include Guinness stout, Smirnoff vodka, Johnnie Walker whisky and Captain Morgan rum. Diageo recently sold its wine operations in Australia and its Jamaican brewing operations. That freed up cash it can use to expand its main spirits businesses. They include its upcoming deal to buy Australian whisky maker Starward. In the six months ended December 31, 2015, Diageo’s sales fell 5.0% to 5.6 billion pounds from 5.9 billion a year earlier (1 pound=$1.85 Canadian). If you exclude the brands that Diageo recently sold and the negative impact of currency exchange rates, sales gained 1.8%. Earnings per ADR fell 4.7%, to 2.05 pounds from 2.15. (Each American Depositary Receipt represents four common shares.)...

EBAY INC. $24 (Nasdaq symbol EBAY; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 1.2 billion; Market cap: $28.8 billion; Price-to-sales ratio: 3.3; No dividends paid; TSINetwork Rating: Above Average; www.ebay.com) operates online auction websites in over 30 countries. Sellers pay fees to list and sell their goods through these sites. In the past few years, eBay has expanded the availability of new merchandise: new items at fixed prices now account for 80% of eBay’s total transactions. The company also operates several other popular websites, including StubHub (ticket sales for live events), Shopping.com (comparison shopping) and Rent.com (apartment and house rentals). These services are in addition to its local websites. As a group, they sell classified ads in over 1,000 cities....

QUAKER CHEMICAL CORP. $85 (New York symbol KWR; Income Portfolio, Manufacturing & Industry sector; Shares outstanding: 13.2 million; Market cap: $1.1 billion; Price-to-sales ratio: 1.5; Dividend yield: 1.5%; TSINetwork Rating: Average; www.quakerchem.com) make lubricants that keep mechanical parts from rusting. Sales in 2015 fell 3.7%, to $737.6 million from $765.9 million in 2014. That’s mainly due to unfavourable exchange rates and lower demand from steel producers. However, a cost-cutting plan lifted its earnings per share by 4.0%, to $4.43 from $4.26. Quaker needs oil to make its products, so lower crude prices are cutting its costs. Its earnings should improve to $4.58 a share in 2016. The stock trades at a reasonable 18.6 times that forecast....

AGILENT TECHNOLOGIES INC. $40 (New York symbol A; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 327.8 million; Market cap: $13.1 billion; Price-to-sales ratio: 3.2; Dividend yield: 1.2%; TSINetwork Rating: Average; www.agilent.com) makes testing equipment for medical research labs. In November 2015, the company paid $242 million for Seahorse Bioscience. This firm makes equipment that lab researchers use to measure cellular response to new drugs. That helps pharmaceutical firms develop new treatments for cancer and infectious diseases. The company also enhanced its product line by purchasing Cartagenia, a Belgian firm that makes software for Agilent’s medical-testing equipment. It paid $60 million euros for this business....

HP INC. $12 (New York symbol HPQ; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.7 billion; Market cap: $20.4 billion; Price-to-sales ratio: 0.2; Dividend yield: 4.2%; TSINetwork Rating: Average; www.hp.com) earned $645 million in its fiscal 2016 first quarter, which ended January 31, 2016. That’s down 15.7% from $765 million a year earlier. Earnings per share fell 12.2%, to $0.36 from $0.41, on fewer shares outstanding. Sales declined 11.6%, to $12.2 billion from $13.9 billion. Personal computer sales (62% of the total) fell 12.8%. Weak demand for new machines forced HP to cut its selling prices. Sales of printers (38%) dropped 17.0%. HP holds cash of $3.7 billion, or $2.12 a share. Its long-term debt of $6.7 billion is a manageable 33% of its market cap....

MCKESSON CORP. $157 (New York symbol MCK; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 229.0 million; Market cap: $36.0 billion; Price-to-sales ratio: 0.2; Dividend yield: 0.7%; TSINetwork Rating: Above Average; www.mckesson .com) is buying the Rexall chain of 470 drug stores in Canada for $2.2 billion. The company expects to complete the purchase by the end of 2016. McKesson already distributes prescription drugs and other products to Rexall, and this familiarity helps cut the risk of an unpleasant surprise. Excluding integration charges and currency exchange rates, the company expects the new operations will add to its earnings in the first year. McKesson is a hold.

APACHE CORP. $50 (New York symbol APA; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 378.3 million; Market cap: $18.9 billion; Price-to-sales ratio: 3.0; Dividend yield: 2.0%; TSINetwork Rating: Average; www.apachecorp.com) continues to sell overseas properties to focus on its less-risky onshore oil and gas operations here in North America. As a result, its production in 2015 fell 9.9%, to 486,775 barrels a day from 540,212 in 2014. Due to lower oil and gas prices, it lost $130 million, or $0.34 a share, in 2015 compared to a profit of $2.0 billion, or $5.21. The company plans to spend $1.4 billion to $1.8 billion on capital projects in 2016, down from $4.7 billion in 2015. That should let it continue to pay quarterly dividends of $0.25 a share, for an annualized yield of 2.0%. In 2015, dividend payments totaled $377 million....

ADOBE SYSTEMS INC. $93 (Nasdaq symbol ADBE; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 497.8 million; Market cap: $46.3 billion; Price-to-sales ratio: 9.6; No dividends paid since June 2005; TSINetwork Rating: Average; www.adobe.com) continues to see strong demand for its subscription services, particularly the Creative Cloud package of photoediting and desktop-publishing programs. In the quarter ended February 29, 2016, the company added 798,000 Creative Cloud subscribers (net of cancellations). This service now has around 7 million users. However, the stock trades at an expensive 33.2 times the $2.80 a share Adobe will likely earn in the year ending November 30, 2016. Moreover, Adobe gets 40% of its revenue from outside the U.S., and the high U.S. dollar is hurting the contribution of its overseas businesses. Adobe is still a hold.