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Tickers in this Article: CLC, UA, EOG, CEO, CAG, DEG, GWW
After this morning's trading, the market is looking good. The Nasdaq is trading up 1.2%; the S&P 500 is up 0.6%; and the Dow is trading up 0.7%. Formerly run as a private organization, the NYSE became a public entity in 2005 following the acquisition of electronic trading exchange Archipelago.

The biggest movers traded on the NYSE so far are:
CompanyMarket CapPercentage Change
Harte-Hanks, Inc. (NYSE:HHS)2.7 million-18.5%
Amphenol (NYSE:APH).32 billion+14.4%
VMware (NYSE:VMW).3 billion+10.1%
WW Grainger (NYSE:GWW).25 billion+8.4%
Mednax Inc. (NYSE:MD).28 billion-7.4%
Honeywell International (NYSE:HON).5 billion+6.6%
Salesforce.com (NYSE:CRM).5 billion+6.1%
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Taking a 18.5% hit, Harte-Hanks (NYSE:HHS) is currently trading at $7.54 per share. The company is currently trading a volume of 637,872 shares. Volume indicates the level of interest that investors have in a company at its current price. There are many tools investors can use to evaluate a stock, including margins. Margins, quite simply, are earnings expressed as a ratio, or a percentage of sales, and this allows investors to compare the profitability of different companies, while net earnings, which are presented as an absolute number, cannot. HHS has a gross profit margin of 61.7%. Operating margin for HHS is 6.6% and net margin is 5.1%, both high relative to its gross margin.

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. To a large degree, the debt-equity (D/E) ratio provides another vantage point on a company's leverage position, in this case, comparing total liabilities to shareholders' equity, as opposed to total assets in the debt ratio. The debt-equity ratio of 26% is relatively low. Companies with low D/E ratios are more attractive to investors because they are better able to protect their business interests in times of decline. This easy-to-calculate ratio provides a general indication of a company's equity-liability relationship and is helpful to investors looking for a quick take on a company's leverage.

Amphenol (NYSE:APH) has soared 14.4% to reach a current price of $58.77 per share. With 2.3 million shares changing hands so far today, the company's volume is three times its current three-month average. High volume indicates a lot of investor interest while low volume indicates the opposite. 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. APH's gross profit margin is 34.4%. Operating margin for APH is 18.9% and net margin is 13.1%, both low relative to its gross margin.

Valuation ratios include 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 P/E ratio has been used for ages by analysts and still remains one of the most relevant pieces of stock valuation. The P/E ratio for APH is 16.7, above the industry average of 15.34. This could mean that the market is expecting big things over the next few months or years. 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

VMware (NYSE:VMW) is currently at $88.43 per share after a dramatic increase of 10.1%. The company's volume is currently 3.8 million shares. Trading activity is down from yesterday when 5.9 million shares changed hands. A stock's volume conveys how excited investors are about it. 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. VMW's gross profit margin of 91.9% is on the high side. A high gross profit margin generally means that the company can make a reasonable profit on sales, provided that overhead costs do not increase. Relative to its gross profit margin, VMW's operating profit margin of 20.6% and net profit margin of 19.8% are high.

Valuation ratios include 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 price/earnings to growth (PEG) ratio can reveal value what price/earnings (P/E) ratios alone may not so that if a company has a high P/E ratio (an indication that its stock is overpriced) but its earnings are growing very quickly, the PEG ratio may reveal that the company is actually fairly valued, or perhaps even a bargain. VMW has a PEG ratio of 1.82. Because of the adjustment for earnings growth rate, the PEG ratio is somewhat more useful than many formulas for comparing companies in different industries.

Increasing 8.4%, Grainger (NYSE:GWW) is trading at $204.88 per share. So far today, the company's volume is 1.1 million shares, 1.7 times the current daily average. 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. 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. GWW's gross profit margin is 45.4%. The operating margin ratio is calculated by dividing operating income by sales and provides a measure of what percentage of a company's revenues is available to pay its fixed costs. GWW's operating profit margin is 13.9%. Net profit margin is calculated by dividing net income by sales; the higher the net profit margin, the better. The company's net profit margin is 8.2%.

It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. The price/book value ratio, often expressed simply as "price-to-book", provides investors a way to compare the market value, or what they are paying for each share, to a conservative measure of the value of the firm. GWW's P/B ratio of 5.17 shows that its share price is higher than its book value. This may be a sign that the company is overvalued. All else being equal, a stock with a low P/B value ratio is more attractive than a stock with a high ratio. SEE: How Buybacks Warps The Price-To-Book Ratio

At $61.81, Mednax (NYSE:MD) has slipped 7.4%. This morning, the company is trading a volume of 639,749 shares. Volume is used to evaluate how meaningful the price movement of a stock is. 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. MD has a gross profit margin of 34.5%. MD has an operating profit margin of 18.8% and a net profit margin of 13.6%, both low compared to its gross profit margin.

Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. The price/sales ratio measures a company's stock market price by its revenues. MD has a high P/S ratio of 2.24. In young companies, a high P/S ratio is a sign of sales growth that is expected to turn into earnings and cash flow. It is important to keep in mind when looking at the P/S ratio that just because a company is generating revenues, this does not mean that the company is profitable, and in the long run, profits drive stock prices.

After rising 6.6%, Honeywell (NYSE:HON) is currently trading at a share price of $58.15. The company's volume for the day so far is 4.2 million share, 1.3 times its average over the past three months. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. 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. HON has a low gross profit margin of 24.5%. Investors should track gross profit margin ratios over several years in order to see if earnings are consistent, growing or declining. HON's operating margin of 12.9% and net margin of 5.9% are low relative to its gross margin.

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 debt ratio shows the proportion of assets that a company is financing through debt. HON has a high debt ratio of 70.9%. This might mean that the company now has low borrowing capacity, which reduces it's financial flexibility. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.

Salesforce.com (NYSE:CRM) is currently trading at $134.50 per share, a 6.1% increase. So far today, 1.3 million shares of the company's stock have changed hands. This is less trading activity than there was yesterday. If a stock price moves on high volume, this means that the change is a significant one. There are many tools investors can use to evaluate a stock, including margins. Margins, quite simply, are earnings expressed as a ratio, or a percentage of sales, and this allows investors to compare the profitability of different companies, while net earnings, which are presented as an absolute number, cannot. CRM has a high gross profit margin of 90.7%. This may indicate that the company is over-pricing its products and/or services. The operating and net profit margins for CRM are both negative. This is because the company reported net and operating losses in the most recent quarter.

Investors can make use of valuation ratios to estimate whether a stock is fairly valued. The capitalization ratio is calculated by dividing long-term debt by the sum of long-term debt and shareholders' equity. CRM 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. A low level of debt and a healthy proportion of equity in a company's capital structure is an indication of financial fitness.

The Bottom Line No matter the economic climate, Wall Street will always have stocks that make major moves each week. Daily stock performance should be weighed against historical performance and put in context of the market overall. Tools like valuation ratios and profit margins, however, are only as useful as the context you put them in; remember to take historical data and competitor performance into account.

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