New Lows
The Irrelevant Investor
APRIL 26, 2022
The good news is stocks are getting less expensive. The bad news is that's happening because they're falling. The price-to-sales ratio of the average stock in the Russell 1000 is back to pre-pandemic levels, falling roughly one-third from its 2021 highs. Cheap stocks aren't bringing down the average, it's the expensive stocks that are doing it. The highest decile of stocks in the Russell 1000 traded at an average of 35x price-to-sales towards the end of last year.
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