5 Stocks with Atmospheric Price Sales Ratios

Short sellers are always looking for stocks that have a large market capitalization, no earnings, and either no or very low sales.

The price/sales ratio measures the price of the stock based on its revenues. It is calculated on a per share basis by dividing the share price by the sales per share. A P/S below 1 is excellent. Depending on the type of company, a P/S of 1 to 2 is reasonable. A P/S of over 5 is usually unfavorable and means that the stock is very overpriced based on its sales.

Here are five stocks which have market caps of over $500 million, negative earnings, and very low revenues [and therefore extremely high P/S ratios]. Four out of five are biotech companies, so even with bad financials, they can still spike up from successful clinical trials and new drug approvals.

Caution for potential short sellers: Just because a stock is over-priced, doesn't mean the stock can't become more overpriced.

Halozyme Therapeutics Inc. (HTI) P/S 907
MannKind Corp. (MNKD) P/S 11,429
Medis Technologies Ltd. (MDTL) P/S 943
Miramar Mining Corp. (MNG) P/S 2734
Onyx Pharmaceuticals Inc. (ONXX) P/E 4772

You can track these stocks at stockpickr.com.

Disclosure: Author does not own or short any of the above.

Comments

[jimmy Turano:]

5 Stocks with Atmospheric Price Sales Ratios
YOU LEFT OUT THE MOST MANIPULATED STOCK OF ALL, NASTECH (NSTK)
POOR RECORD WITH FDA IN THE PAST AND FUTURE DISAPPOINTMENTS DOWN THE ROAD.
IF THE BIGGEST PHARMA STOCKS ARE NOT GETTING DRUGS APPROVED BY THE FDA ESPECIALLY SO FAR IN 2007, NSTK IS A WANA BE COMPANY WITH MORE HYPE AS CONSISTENCY THAN PAST RESULTS.
FROM MANAGEMENT TO EARNINGS TO TERMINAL DAMAGE FOR INVESTORS THESE PAST 5 YEARS.
JT

2007 Apr 15 10:31 AM