February began on a subdued note for U.S. equities, with investors turning more selective around AI exposure. Stocks slid as the market repriced lofty expectations and punished companies viewed as potential AI “losers,” especially in software and financial services, amid fears that newer AI tools could pressure pricing power and disrupt incumbents. With headlines driving short-term swings, retail investors can benefit most from a disciplined approach by reassessing allocations, tightening risk controls and ensuring the portfolio remains aligned with long-term goals.
Hence, the traditional way of selecting stocks is a good idea. Sales growth provides a more reliable view for evaluating stocks compared with earnings-focused metrics. Stocks like Genuine Parts Company GPC, Wheaton Precious Metals Corp. WPM and FirstEnergy Corporation FE are worth considering.
Sales growth is one of the clearest signals of a company’s underlying momentum. Unlike earnings, which can be shaped by accounting decisions or short-term cost actions, revenues capture actual demand for a firm’s products and services. Sustained top-line expansion often points to rising market share, a growing customer base, effective pricing, or successful entry into new markets. It can also serve as an early indicator of future profit potential as higher volumes improve operating leverage, support margin expansion and help compound long-term shareholder value.
Revenue trends are most meaningful in context. Comparing growth with peers and industry norms and factoring in the business cycle helps separate durable strength from a temporary lift. Focus should be on growth quality, favoring repeatable demand instead of one-offs, heavy discounting or acquisition-driven gains. Companies that grow through varied conditions tend to generate steadier cash flows, enabling reinvestment and balance sheet strength, and signaling 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 Solid Sales Growth to Buy
Atlanta-based Genuine Parts distributes automotive and industrial replacement parts and materials. GPC has a network of more than 10,700 locations, primarily in North America, Europe and Australasia.
GPC’s expected sales growth rate for 2026 is 3.7%. Genuine Parts carries a Zacks Rank #2 at present.
Based in Vancouver, Canada, Wheaton Precious Metals is one of the largest precious metal streaming companies globally that generates its revenues from the sale of precious metals and cobalt. WPM enters into purchase agreements to buy the entirety or a portion of the precious metals or cobalt production from mines located worldwide.
Wheaton Precious Metals’ expected sales growth rate for 2026 is 35.4%. WPM currently carries a Zacks Rank #2.
Headquartered in Akron, OH, FirstEnergy is a diversified energy company. Through its subsidiaries and affiliates, FE is engaged in the transmission, distribution and generation of electricity.
FE’s sales are expected to rise 3.6% in 2026. FirstEnergy carries a Zacks Rank #2 at present.
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FirstEnergy Corporation (FE): Free Stock Analysis Report Genuine Parts Company (GPC): Free Stock Analysis Report Wheaton Precious Metals Corp. (WPM): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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