With the second-quarter earnings season underway, investors are assessing corporate results. However, decisions should also account for macroeconomic trends and their impact on long-term growth. Higher oil prices amid Middle East tensions may keep inflation elevated and encourage the Federal Reserve to remain cautious. Stretched AI-stock valuations, tariff uncertainty and shifting trade policies further highlight the need to evaluate company fundamentals, valuation and earnings potential carefully.
In such a situation, the traditional way of selecting stocks is a good idea. Sales growth provides a more reliable basis for evaluating stocks compared with earnings-focused metrics. In this regard, stocks like Crown Holdings Inc. CCK, J.B. Hunt Transport Services, Inc. JBHT and JPMorgan Chase & Co. JPM are worth betting on.
Sales growth is among the clearest indicators of a company’s core business strength. While several factors can shape earnings, sales offer a more direct view of customer demand and a company’s ability to expand product or service volumes. Consistent revenue gains may signal supportive industry conditions, market-share expansion, pricing strength, effective product launches, or entry into new regions and customer categories.
Rising sales can also create a firmer base for stronger profitability. As revenues increase, businesses may allocate fixed expenses across a larger sales base, improving operating leverage and supporting margin growth. However, revenue growth should not be assessed in isolation. It becomes more meaningful when viewed against industry conditions, competitor trends, pricing dynamics, customer composition and the overall economic environment.
The durability and composition of sales growth matter just as much. Recurring income, repeat buying, volume-driven improvement and sustained demand typically carry greater value than gains arising from short-lived influences. Companies capable of delivering dependable, high-quality revenue growth through different market conditions are generally better positioned to produce steady cash flows, fund business expansion, strengthen competitive advantages and create lasting shareholder returns.
Selecting the Potential Winning Stocks
To shortlist stocks with impressive sales growth and a high cash balance, we have selected 5-Year Historical Sales Growth (%) greater than X-Industry and Cash Flow of more than $500 million as our main screening parameters.
But sales growth and cash strength are not the absolute criteria for selecting stocks. Hence, we have added other factors to arrive at a winning strategy.
P/S Ratio less than X-Industry: This metric determines the value placed on each dollar of a company’s revenues. The lower the ratio, the better it is for picking a stock since the investor is paying less for each unit of sales.
% Change F1 Sales Estimate Revisions (four weeks) greater than X-Industry: Estimate revisions, better than the industry, are often seen to trigger an increase in stock price.
Operating Margin (average last five years) greater than 5%: The operating margin measures how much every dollar of a company's sales translates into profits. A high ratio indicates that the company has good cost control and sales are increasing faster than costs — an optimal situation.
Return on Equity (ROE) greater than 5%: This metric will ensure that sales growth is translated into profits and the company is not hoarding cash. A high ROE means that the company is spending wisely and is, in all likelihood, profitable.
Zacks Rank less than or equal to 2: Zacks Rank #1 (Strong Buy) or 2 (Buy) stocks are known to outperform, irrespective of the market environment. You can see the complete list of today’s Zacks #1 Rank stocks here.
3 Stocks With Solid Sales Growth to Buy Now
Based in Philadelphia, PA, Crown Holdings is a leading global manufacturer of packaging products for consumer goods. CCK makes a wide variety of steel and aluminum cans for food, beverage, household and other consumer products and metal vacuum closures, steel crowns and caps.
Crown Holdings’ expected sales growth rate for 2026 is 9.4%. CCK carries a Zacks Rank #2 at present.
Based in Lowell, AR, J.B. Hunt Transport provides a broad range of transportation, brokerage and delivery services to customers across the United States, Canada and Mexico. JBHT operates through five complementary business segments: Intermodal, Dedicated Contract Services, Integrated Capacity Solutions, Final Mile Services and Truckload.
JBHT’s expected sales growth rate for 2026 is 12.5%. J.B. Hunt Transport currently sports a Zacks Rank #1.
Headquartered in New York, JPMorgan is one of the biggest global banks. JPM operates in more than 60 countries worldwide.
JPM’s sales are expected to rise 12.6% in 2026. JPMorgan sports a Zacks Rank #1 at present.
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This article originally published on Zacks Investment Research (zacks.com).