After this morning's trading, the market is looking good. The Nasdaq has increased 0.1%; the S&P 500 is trading up 0.5%; and the Dow has climbed 0.4%. The NYSE is a stock exchange based in New York City, considered the largest equities-based exchange in the world based on total market capitalization of its listed securities.
The biggest movers traded on the NYSE so far are:
|Company||Market Cap||Percentage Change|
|Con Way Inc (NYSE:CNW)||$1.99 billion||-15.8%|
|RTI International Metals, Inc. (NYSE:RTI)||$680.6 million||+12.9%|
|Kraton Performance Polymers Inc (NYSE:KRA)||$755.1 million||-12.9%|
|Polypore International, Inc. (NYSE:PPO)||$1.73 billion||-11.7%|
|Rogers Corporation (NYSE:ROG)||$583.2 million||+9.3%|
|Energizer Holdings, Inc. (NYSE:ENR)||$5.09 billion||-8.8%|
|Allergan (NYSE:AGN)||$24.91 billion||+6.4%|
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Shares of Con Way (NYSE:CNW) are currently trading at $29.99, a steep decline of 15.8%. So far today, 1.7 million shares have changed hands. Volume is an important indicator because it indicates how significant a price shift is. Valuation ratios like the price to earnings (P/E) ratio, the price to earnings growth (PEG) ratio, the price to sales (P/S) ratio, the price to book (P/B) ratio, and the dividend yield are useful in determining how attractive a potential or existing investment is. The price/book value ratio is one of the more common methods of determining whether a stock is fairly valued. CNW's P/B ratio of 2.13 shows that its share price is higher than its book value. It is important to take the company's debt into account when using the P/B ratio as debt can boost a company's liabilities to the point where they wipe out much of the book value of its hard assets, creating artificially high P/B values. To put things in perspective, should be made among companies in the same industry rather than across industries. SEE: How Buybacks Warps The Price-To-Book Ratio
RTI International Metals (NYSE:RTI) rose a significant 12.9% to reach $25.35 per share. With 379,475 shares changing hands so far today, the company's volume is 1.3 times its average over the past three months. In technical analysis, trading volume is used to determine the strength of a market indicator. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. Price/earnings ratios (P/E ratios) provide a measure of the relative value of a stock. The P/E ratio for RTI is 68.0, above the industry average of 14.04. Generally speaking, the higher the P/E ratio, the higher the market expectations for a company's future performance. From the investor's perspective, a stock with a lower ratio is relatively cheaper than a stock with a higher ratio. SEE: Investment Valuation Ratios: Price/Earnings Ratio
After a precipitous drop of 12.9%, Kraton Performance Polymers (NYSE:KRA) is now trading at a share price of $20.40. So far today, 756,048 shares of the company's stock have changed hands. This is more trading activity than there was yesterday. Price change alone is not enough to know how a stock is doing. Volume is an important secondary indicator used to confirm trends suggested by price movement. A wide array of ratios can be used by investors to estimate the attractiveness of a potential or existing investment and get an idea of its valuation. The price/earnings to growth (PEG) ratio is calculated by dividing the price/earnings ratio by growth in earnings-per-share; the lower the PEG ratio, the more reasonably valued the security. KRA's PEG ratio of 0.77 is in line with the industry average. Because of the adjustment for earnings growth rate, the PEG ratio is somewhat more useful than many formulas for comparing companies in different industries.
Taking a 11.7% hit, Polypore International (NYSE:PPO) is currently trading at $32.81 per share. The company's volume is currently 4.1 million shares for the day, 5.7 times the average daily volume. Volume is used to evaluate how meaningful the price movement of a stock is. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. The price/sales ratio measures a company's stock market price by its revenues. PPO has a high P/S ratio of 2.18. In young companies, a high P/S ratio is a sign of sales growth that is expected to turn into earnings and cash flow. All things being equal, a low P/S ratio is good news for investors, while a very high one can be a warning sign.
Rogers (NYSE:ROG) has risen 9.3% to hit a current price of $39.17 per share. The company is currently trading a volume of 138,763 shares. High volume indicates a lot of investor interest while low volume indicates the opposite. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. The debt ratio measures the leverage of a company, and a company's leverage is a good way to assess risk. ROG has a low debt ratio of 48.7%. A low debt ratio means the company has more available cash flow. However, one thing to note with this ratio: it isn't a pure measure of a company's debt (or indebtedness), as it also includes operational liabilities, such as accounts payable and taxes payable.
Falling 8.8%, Energizer Holdings (NYSE:ENR) is currently at a share price of $70.94. The company's volume is currently 1.6 million shares for the day, 2.6 times the current three-month average. If a stock price makes a big move up or down, volume lets us know the significance of that move. While investment valuation ratios are useful tools in estimating the attractiveness of an investment, remember that it is important to look at a company's historical performance and compare the company ratios with its competitors and industry overall. The debt-equity (D/E) ratio compares the total liabilities for a company to its total shareholder equity. ENR has a high D/E ratio of 108%. Companies in capital-intensive industries usually have higher D/E ratios because they need to buy more property, plants, and equipment to operate. The D/E ratio is not a pure measurement of a company's debt because it includes operational liabilities in total liabilities.
Allergan (NYSE:AGN) is currently trading at $87.31 per share, a 6.4% increase. So far today, the company's volume is six million shares. If a stock price moves on high volume, this means that the change is a significant one. Investment valuation ratios can be very useful in determining the value of a stock, but it is very important to keep in mind that while some financial ratios have general rules (or a broad application), in most instances it is a prudent practice to look at a company's historical performance and use peer company/industry comparisons to put any given company's ratio in perspective. The capitalization ratio is calculated by dividing long-term debt by the sum of long-term debt and shareholders' equity. AGN has a fairly low capitalization ratio of 21.7%. Investors generally consider a company with low debt and high equity levels is a good quality investment. Prudent use of leverage (debt) increases the financial resources available to a company for growth and expansion.
The Bottom Line On any given day, a particular stock may see positive or negative change in its share price. It is important to weigh current activity against historical performance when making any investment decisions. However, these fundamental metrics must be analyzed with historic data, industry information in addition to firm specific financial statements.