The Nasdaq has been relatively flat, the S&P 500 is trading down 0.1% and the Dow is down 0.3% this morning. Today, more than half of all NYSE trades are conducted electronically, although floor traders are still used to set pricing and deal in high volume institutional trading.
The biggest movers traded on the NYSE so far are:
|Company||Market Cap||Percentage Change|
|Par Pharmaceutical Companies, Inc. (NYSE:PRX)||$1.34 billion||+37%|
|Gardner Denver, Inc. (NYSE:GDI)||$2.64 billion||-9.4%|
|3D Systems Corporation (NYSE:DDD)||$1.69 billion||+5.1%|
|Mead Johnson Nutrition (NYSE:MJN)||$15.7 billion||-4.1%|
|WESCO International, Inc. (NYSE:WCC)||$2.52 billion||-4.1%|
|NACCO Industries, Inc. (NYSE:NC)||$978.6 million||-3.4%|
|Terra Nitrogen Company, L.P. (NYSE:TNH)||$3.78 billion||+2.7%|
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Par Pharmaceutical Companies (NYSE:PRX) is trading at $50.11 per share, a significant rise of 37%. The company is currently trading a volume of 5.4 million shares. A stock's volume conveys how excited investors are about it. Profit-margin ratios measure how much money a company squeezes from its total revenue or total sales. Investors can look at a company's gross profit margin, operating profit margin and net margin to understand a company's profitability. The gross profit margin for PRX is 42.5%. All else being equal, investors should feel more confident investing in a company with a high operating margin than one with a low operating margin. Operating margin for PRX is -7.8%. This means that the company came in with a net operating loss in the most recent quarter. Net profit margin is calculated by dividing net income by sales. Net profit margin for the company is 3.5%.
Looking at a company's valuation ratios is a good way of getting a basic idea as to its value as an investment. The capitalization ratio is calculated by dividing long-term debt by the sum of long-term debt and shareholders' equity. PRX's capitalization ratio is 34.9%. Prudent use of leverage (debt) increases the financial resources available to a company for growth and expansion.
Gardner Denver (NYSE:GDI) is trading at $47.80 per share, down 9.4%. At 2.9 million shares, the company's volume so far today is six times the current daily average. High volume indicates a lot of investor interest while low volume indicates the opposite. Margin analysis tells us how effectively management can wring profits from sales and how much room a company has to withstand a downturn, fend off competition and make mistakes. GDI has a gross profit margin of 36.4%. Operating margin provides a measure of a company's ability to pay its fixed costs such as interest on debt, particular if its business were to decline in the future. Relative to its gross profit margin, GDI's operating margin of 13.2% is on the low side. Tracking net profit margin over time for a single company can be a valuable tool for seeing how a business is developing. The company's net profit margin is 11.2%.
When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. The price/earnings ratio is calculated by taking a stock price and dividing it by the earnings-per-share (EPS). GDI's P/E ratio of 10.0 falls below the industry average of 29.41. A low P/E might arise due to substantial inherent risk of the firm and its operations, poor return on equity, or improper valuation of the market. To determine the P/E ratio, an investor divides the market price of the stock by the earnings-per-share (EPS) of the stock. SEE: Investment Valuation Ratios: Price/Earnings Ratio
3D (NYSE:DDD) is currently trading at $34.71 per share, a 5.1% increase. So far today, 720,396 shares of the company's stock have changed hands. This is more trading activity than there was yesterday. Volume indicates the level of interest that investors have in a company at its current price. Profit-margin ratios can give investors deeper insight into management efficiency than earnings alone can provide. Gross profit margin, operating profit margin and net margin are commonly used margins. DDD's gross profit margin is 53.4%. The operating profit margin indicates how much EBIT is generated per dollar of sales. Operating profit margin for DDD is 12.8%. Net profit margin is a good tool for fundamental analysis and long-term investing but is less useful for technical analysts and short-term traders. The company has a net profit margin of 13.4%.
A company's investment value can be estimated using valuation ratios such as 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. The debt-equity (D/E) ratio compares the total liabilities for a company to its total shareholder equity. DDD's D/E ratio is 53%. The D/E ratio percentage provides a much more dramatic perspective on a company's leverage position than the debt ratio percentage.
At $73.83, Mead Johnson (NYSE:MJN) has slipped 4.1%. So far today, the company's volume is 2.6 million shares, 0.7 times its current three-month average. If a stock price moves on high volume, this means that the change is a significant one. Margin analysis is a great way to understand the profitability of companies. MJN has a gross profit margin of 64.4%. While ratios such as price/earnings (P/E) or price/book value look at the relative attractiveness of a stock, the net profit margin ratio focuses on company performance rather that stock market valuation. With a net profit margin of 14%, the company has a high one compared to its gross profit margin. Investors in companies with high profit margins can be confident that even if sales dip slightly, profits will remain strong. Investors in growth stocks or short-term traders may be less interested in the operating margin ratio. MJN's operating profit margin is 25.2%.
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 dividend yield is calculated by dividing a company's dividends per share by its stock price. MJN's dividend yield of 1.6% is fairly low. This may indicate that the company's stock is overpriced. A stock's dividend yield depends on the nature of a company's business, its posture in the marketplace (value or growth oriented), its earnings and cash flow, and its dividend policy. SEE: Due Diligence On Dividends
After a decline of 4.1%, WESCO International (NYSE:WCC) has hit a share price of $55.35. So far today, the company's volume is 431,930 shares. If a stock is trading on low volume, then there is not much interest in the stock. On the other hand, if a stock is trading on high volume, then there is a lot of interest in the stock. Profit-margin ratios help us to keep score, as measured over time, of management's ability to generate profits and manage costs and expenses. There are three key profit-margin ratios: gross profit margin, operating profit margin and net profit margin. WCC has a low gross profit margin of 20.3%. Investors should track gross profit margin ratios over several years in order to see if earnings are consistent, growing or declining. Operating margin for WCC is 5.2% and net margin is 3.4%, both low relative to its gross margin.
Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. The price/sales ratio is used for spotting recovery situations or for double-checking that a company's growth has not become overvalued. The P/S ratio for WCC is 0.45, which is relatively low. A company with a lower P/S ratio is generally considered more attractive, since investors are paying less for each dollar of sales. A limitation of the P/S ratio is that the price component measures only stock market captialization, while sales are a function of the entire capital structure, potentially leading to wide differences between levered and unlevered companies.
NACCO Industries (NYSE:NC) is currently trading at a share price of $112.75, a 3.4% decline. At 11,404 shares, the company's volume so far today is 0.3 times the average daily volume. When a stock price moves up or down, watching the volume is a good way of identifying how significant that shift is. Calculating the profit margin is a great way to gain insight into aspects of how well a company generates and retains money. Instead of measuring how much managers earn from assets, equity or invested capital, profit-margin ratios measure how far a company stretches its total revenue or total sales. NC has a low gross profit margin of 19.2%. A low gross profit margin compared to competitors may be a sign that the company is under-pricing its products and/or services. Compared with its gross profit margin, NC's operating profit margin of 4.7% and net profit margin of 3.7% are low.
Investors can make use of valuation ratios to estimate whether a stock is fairly valued. The debt ratio is calculated by dividing total liabilities by total assets. The debt ratio for NC is 65.1%, which is relatively high. This means that the company's cash flow is significantly impacted by paying off principal and interest and that any negative change in performance or rise in interest rates could result in default. 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.
Terra Nitrogen Company (NYSE:TNH) has increased to a share price of $210.12, a 2.7% rise. The company's volume for the day so far is 9,064 shares. Trading activity is down from yesterday when 23,308 shares changed hands. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. Margin ratios highlight companies that are worth further examination. TNH has a gross profit margin of 68.5%. TNH has an operating profit margin of 63.1% and a net profit margin of 63.9%, both low compared to its gross profit margin.
Investment valuation ratios can be very useful in estimating whether a stock price is too high, reasonable or a bargain investment opportunity. A simple P/E ratio can reveal the stock's real market value and show how the valuation compares to its industry group or a benchmark like the S&P 500 Index. TNH's P/E ratio is 13.2. High P/E stocks could be "growth" stocks, while low PE stocks may be "value" stocks. SEE: The P/E Ratio: A Good Market-Timing Indicator
The Bottom Line On any given day, a particular stock may see positive or negative change in its share price. Daily stock performance should be weighed against historical performance and put in context of the market overall. However, these fundamental metrics must be analyzed with historic data, industry information in addition to firm specific financial statements.