February has just started, and if you haven’t yet taken stock of your portfolio and made targeted adjustments aimed at improving risk-adjusted returns, now is the time. Several forces that defined 2025 continue to steer markets — sustained optimism around AI, the Federal Reserve’s policy path and persistent geopolitical and tariff-related uncertainties. With signals often conflicting and headlines driving short-term swings, retail investors can benefit most from a disciplined approach — reassessing allocations, tightening risk controls and ensuring the portfolio remains aligned with long-term goals.
Hence, the traditional method of choosing stocks is a good idea. Sales growth provides a more reliable view for evaluating stocks compared with earnings-focused metrics. Stocks like Universal Health Services, Inc. UHS, Pinnacle West Capital Corporation PNW and Methanex Corporation MEOH are worth considering.
Sales growth is one of the clearest indicators of a company’s underlying momentum. Unlike earnings, which can be influenced by accounting choices or short-term cost cuts, revenue reflects real demand for a firm’s products and services. Consistent top-line expansion often points to gaining market share, a growing customer base, or successful entry into new markets. Strong revenue trends can also offer an early read on future earnings potential, as higher volumes improve operating leverage and support sustained long-term value creation.
Still, sales figures matter most in context. Benchmarking growth against peers, industry cycles and the broader economic backdrop helps distinguish durable strength from a temporary lift. Companies that can grow through different conditions tend to generate more dependable cash flows, giving management room to reinvest, fund strategic initiatives and protect balance sheet quality without overrelying on debt. Tracking these patterns can help investors spot businesses with resilient competitive advantages and a longer runway for expansion.
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%: 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 Robust Sales Growth to Buy
King of Prussia, PA-based Universal Health Services owns and operates acute care hospitals, behavioral health centers, surgical hospitals, ambulatory surgery centers and radiation oncology centers. UHS’ range of services includes general and specialty surgery, internal medicine, obstetrics, emergency room care, radiology, oncology, diagnostic care, coronary care, pediatric services, pharmacy services and/or behavioral health services.
Universal Health Services’ expected sales growth rate for 2026 is 5.2%. UHS carries a Zacks Rank #2 at present.
Headquartered in Phoenix, AZ, Pinnacle West Capital provides electricity services (wholesale or retail) in the state of Arizona through its subsidiaries. PNW is involved in the generation, transmission and distribution of electricity from coal, nuclear, gas, oil and solar.
Pinnacle West Capital’s expected sales growth rate for 2026 is 4.6%. PNW currently carries a Zacks Rank #2.
Based in Vancouver, Canada, Methanex is the world’s largest supplier of methanol to North America, Asia-Pacific, Europe and Latin America. MEOH purchases methanol from others under contract and on the spot market to meet customer requirements.
MEOH’s sales are expected to rise 9.8% in 2026. Methanex carries a Zacks Rank #2 at present.
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Universal Health Services, Inc. (UHS): Free Stock Analysis Report Pinnacle West Capital Corporation (PNW): Free Stock Analysis Report Methanex Corporation (MEOH): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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