Carrie Rosen

The ROE factor is the Return on Equity. This tool is useful to evaluate stock within a company. When it increases, that may suggest that a company is getting better at generating profit without needing the same amount of capital. Typically, a high ROE is a good sign, while a falling ROE is indicative of an issue. Three stocks that show potential for a significant ROE gain at the moment are United Rentals, Inc. (NYSE:URI), Paychex, Inc. (NASDAQ:PAYX), and Reynolds American, Inc. (NYSE:RAI).

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To evaluate a company, there are many measurement tools to consider. One such tool is the Price to Sales Ratio or P/S ratio. There are two ways to calculate it, although both ways achieve about the same conclusion. The lower the P/S ratio number, the better the value, most people agree. Many investors look for price to sales ratios under 1 to determine how they will act on the stock. Three stocks with low P/S ratios currently are MBIA Inc. (NYSE:MBI), Hecla Mining Company (NYSE:HL), and CONSOL Energy Inc. (NYSE:CNX).

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A term used in investing is ROE, which stands for return on equity. It refers to the return on ownership interest or shareholders’ equity of the stock owners. Usually, when the ROE is between 15-20% then it is considered to be favorable. The best way to measure it is by comparing businesses within the same sector. It is a percentage that is calculated by taking a fiscal year’s net income and dividing it by total equity. Three stocks that presently have a high ROE are Tyco International PLC (NYSE:TYC), Best Buy Co Inc (NYSE:BBY), and Dover Corp (NYSE:DOV).

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A price-to-sales ratio is helpful for an investor to determine the value of each dollar of a company’s profits or sales. The P/S ratio, as it is often called, look at stock price for a company relative to its revenues. There are two ways to calculate it, with both ways usually finding the same result.

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The P/B ratio is a shorthand form of price-to-book ratio. It is a measurement tool used to determine whether a stock is undervalued, which investors will look at before deciding what stock to buy into on a particular day. The ratio indicates whether a company’s asset value is comparable to its stock’s market value. A P/B ratio under 1.0 can mean a stock is undervalued, while being above 1.0 indicates an overvalued stock. Three stocks with low price-to-book ratios right now are Ocwen Financial Corp (NYSE:OCN), Yamana Gold Inc. (USA) (NYSE:AUY), and Peabody Energy Corporation (NYSE:BTU).

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If an investor wants to find out growth at a reasonable price then it is often advantageous to look at the price-to-book ratio. It is also called P/B ratio. The tool shows immediately which companies are overvalued or undervalued. A stock with a P/B ratio under 1.0 is said to be undervalued, while if this figure goes above 1.0 then it is overvalued. Three stocks with a low book value at the present moment are American International Group Inc (NYSE:AIG), Citigroup Inc (NYSE:C), and Goldcorp Inc. (USA) (NYSE:GG).

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