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Tickers in this Article: CIEN, FSLR, SHLD, ZUMZ, FFIV, SSYS, ESLT
It's been a bad day for the market so far this morning. The Nasdaq has slipped 0.9%; the S&P 500 is down 0.7%; and the Dow is trading down 0.7%. The Nasdaq Composite Index represents all the stocks that trade on the Nasdaq stock market.

The biggest movers traded on the NASDAQ so far are:
CompanyMarket CapPercentage Change
Ciena (Nasdaq:CIEN)$1.66 billion-16.9%
First Solar (Nasdaq:FSLR)$2.1 billion-11.4%
Sears (Nasdaq:SHLD)$6.12 billion-7.3%
Zumiez (Nasdaq:ZUMZ)$989 million+4.6%
F5 Networks (Nasdaq:FFIV)$8.07 billion-4.1%
Stratasys (Nasdaq:SSYS)$1.48 billion-4.1%
Elbit Systems Ltd (Nasdaq:ESLT)$1.27 billion+3.2%
Broker Summary: Charles Schwab Online Brokerage

Shares of Ciena (Nasdaq:CIEN) are currently trading at $13.89, a steep decline of 16.9%. So far today, the company's volume is 17.5 million shares, 4.3 times the average daily volume. Volume is an important indicator because it indicates how significant a price shift is. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. The debt ratio measures the leverage of a company, and a company's leverage is a good way to assess risk. The debt ratio for CIEN is 102.1%, which is relatively high. As such, the company is highly leveraged and not highly liquid. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.

After a precipitous drop of 11.4%, First Solar (Nasdaq:FSLR) is now trading at a share price of $21.43. The company is trading at a volume of 8.8 million shares. Yesterday, volume was only 6.4 million shares. If a stock price makes a big move up or down, volume lets us know the significance of that move. Investment valuation ratios can be very useful in estimating whether a stock price is too high, reasonable or a bargain investment opportunity. The price/sales ratio measures a company's stock market value by its total revenues or alternatively, a company's price per share by its revenue per share. FSLR's P/S ratio of 0.42 is fairly low. Highly levered companies are likely to have lower P/S ratios because the price aspect of this ratio only measures stock market valuation while sales is a function of both stock market and bond market capitalization. All things being equal, a low P/S ratio is good news for investors, while a very high one can be a warning sign.

After a decline of 7.3%, Sears (Nasdaq:SHLD) has hit a share price of $53.26. At 1.7 million shares, the company's volume so far today is two times its current three-month average. Volume is an important indicator in technical analysis as it is used to measure the worth of a market move. If the markets have made a strong price move either up or down the perceived strength of that move depends on the volume for that period. The higher the volume during that price move the more significant the move. A company's value as an investment is more easily 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 capitalization ratio measures the debt component of the capital structure, or capitalization of a company (i.e., the sum of long-term debt liabilities and shareholder equity) to support operations and growth. The capitalization ratio for SHLD is 30.5%. The capitalization ratio is one of the more meaningful debt ratios because it focuses on the relationship of debt liabilities as a component of a company's total capital base, which is the capital raised by shareholders and lenders.

Zumiez (Nasdaq:ZUMZ) has moved up 4.6% and is currently trading at $33.02 per share. So far today, 454,514 shares have changed hands. In technical analysis, trading volume is used to determine the strength of a market indicator. 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. Price/earnings ratios (P/E ratios) provide a measure of the relative value of a stock. The P/E ratio for ZUMZ is 24.9, above the industry average of 17.63. Generally speaking, the higher the P/E ratio, the higher the market expectations for a company's future performance. 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

Falling 4.1%, F5 Networks (Nasdaq:FFIV) is currently at a share price of $97.89. So far today, the company's volume is 612,633 shares, in keeping with its current daily average. If a stock price makes a big move up or down, volume lets us know the significance of that move. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. When used consistently and uniformly, the price/earnings to growth (PEG) ratio is an essential tool that adds dimension to the price/earnings ratio, allows comparisons across diverse industries and is always on the lookout for value. FFIV has a PEG ratio of 1.48, which is consistent 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.

Stratasys (Nasdaq:SSYS) is currently trading at a share price of $66.40, a 4.1% decline. The company's volume for the day so far is 228,770 shares. This is a sign that there will be less trading activity than there was yesterday. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. 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. One of the favorite tools of many value investors is analyzing price/book value ratios, as it provides a measure of the underlying value of a company's assets as compared to the valuation of its equity. SSYS' stock is trading for more than its book value with a P/B ratio of 7.3. This implies that investors expect management to create more value from a given set of assets and/or that the market value of the firm's assets is significantly higher than their accounting value. To put things in perspective, should be made among companies in the same industry rather than across industries. SEE: Investment Valuation Ratios: Price/Book Value Ratio

Increasing 3.2%, Elbit Systems Ltd (Nasdaq:ESLT) is trading at $30.92 per share. The company's volume is currently 3,650 shares for the day, 0.3 times the average volume over the last three months. The trading volume for a stock indicates the level of investor interest. 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. Dividend yield measures the income that a stock will generate for an investor. ESLT has a dividend yield of 4%. A higher dividend yield may indicate a risk of a fall in the price of the security, or a cut in the level of dividend payments, either of which would have the effect of dropping future returns. SEE: Investment Valuation Ratios: Dividend Yield

The Bottom Line The nature of the market is such that stocks will have good days and bad days. Paying close attention to the previous ratios will help you identify key times to adjust your strategy. Keep in mind that all these ratios should be compared against historical numbers and industry information in order to get a more complete picture.

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