Several studies have shown that low price-to-sales ratio, not price-to-earnings or price-to-book, has been the most reliable indicator of outperforming value stocks. This article shows the top 20 current Magic Formula stocks with the lowest price-to-sales ratios.

You can't spend earnings. At first glance, this probably seems like an odd statement, possibly even incorrect. However, it is not only correct, but an important investing axiom for any type of investor.