Filed Under: ,
Tickers in this Article: BIG, GES, HEI, HEI.A, EXP, VC, DTG
It's been a bad day for the market so far this morning. The Nasdaq is trading down 0.2%; the S&P 500 has declined 0.4%; and the Dow has fallen 0.6%. Also known as the "Big Board", the NYSE relied for many years on floor trading only, using the open outcry system.

The biggest movers traded on the NYSE so far are:
CompanyMarket CapPercentage Change
Big Lots, Inc (NYSE:BIG)$2.47 billion-22%
Guess (NYSE:GES)$3.02 billion-19.9%
HEICO (NYSE:HEI)$1.83 billion+11%
HEICO (NYSE:HEI.A)$732.3 million+9%
Eagle Materials (NYSE:EXP)$1.88 billion+5.2%
Visteon (NYSE:VC)$2.1 billion+4.4%
Dollar Thrifty Automotive Group (NYSE:DTG)$2.11 billion+3%
Beginner's Guide To

Big Lots, Inc (NYSE:BIG) is currently trading at $30.31 per share, after a steep drop of 22%. With 8.5 million shares changing hands so far today, the company's volume is 7.8 times the current three-month average. As a stock moves up or down, it is important to pay attention to the trading volume. This indicates the level of interest: the higher the volume, the more the interest. 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. Perhaps one of the most widely-used stock analysis tools is the price-to-earnings ratio, or P/E. Relative to the industry P/E ratio of 17.75, BIG's 14.4 is low. Companies with low P/E ratios may find it easier to surprise the market to the upside, even if their financial performance is not as strong as that of companies with high P/E ratios. From the investor's perspective, a stock with a lower ratio is relatively cheaper than a stock with a higher ratio. SEE: How To Find P/E And PEG Ratios

Guess (NYSE:GES) is at a share price of $26.87 after a sharp decline of 19.9%. So far today, 6.2 million shares have changed hands. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. 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 assumption with high price/earnings stocks (generally of the growth variety) is that investors are willing to buy at a high price because they believe that the stock has significant growth potential, and the price/earnings to growth (PEG) ratio helps investors determine the degree of reliability of that growth assumption. PEG ratio for GES is consistent with the industry average at 0.83. While P/E ratios are important indicators of market value, a high P/E in and of itself is not bad because it may indicate a company whose earnings are growing very rapidly, so many investors look at the PEG ratio in order to get an idea of whether or not a particular P/E ratio is justified by underlying earnings growth.

HEICO (NYSE:HEI) is trading at $38.63 per share, a significant rise of 11%. At 546,315 shares, the company's volume so far today is more than yesterday's 272,942 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. 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 debt ratio is calculated by dividing total liabilities by total assets. HEI has a low debt ratio of 42.6%. 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.

HEICO (NYSE:HEI.A) has risen 9% and is currently trading at $31.86 per share. This morning, the company's volume is 37,970 shares. This is 1.6 times its current daily average. In technical analysis, trading volume is used to determine the strength of a market indicator. In making a decision about a potential or existing investment, valuation ratios are useful as a basis for seeing whether the stock price is too high, reasonable, or a bargain. Dividend yield is a way to measure how much cash flow you are getting for each dollar invested in an equity position - in other words, how much "bang for your buck" you are getting from dividends. HEI.A has a dividend yield of 0.4%, which is fairly low. This may indicate that the company's stock is overpriced. High dividend yields are generally more important to value investors, investors in larger companies, and income oriented investors than they are to growth investors, investors in small cap stocks, and investors in new or emerging companies. SEE: Due Diligence On Dividends

Eagle Materials (NYSE:EXP) has risen 5.2% to hit a current price of $43.48 per share. The company's volume for the day so far is 646,647 shares, 1.4 times its average over the past three months. 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. Valuation ratios allow the investor to make a quick determination as to a company's investment value. The price/sales ratio measures a company's stock market price by its revenues. EXP's P/S ratio of 3.2 is on the high side. 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 compare P/S ratios for companies in the same industry, as ratios can vary quite widely for companies in different industries.

Rising 4.4%, Visteon (NYSE:VC) is currently trading at $41.62 per share. The company is currently trading a volume of 526,561 shares. If a stock price moves on high volume, this means that the change is a significant one. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. If the price/book value ratio of a stock is high, it may indicate that the stock is expensive, while a lower ratio may indicate that the stock is a bargain. The P/B ratio for VC is 1.53, indicating that the stock is trading for more than its book value. This high share price relative to asset value is likely to indicate that the company has been earning a very high return on its assets. P/B value ratios are particularly useful to value investors, distressed or "vulture" investors, or any other investors purchasing beaten-down securities but are less useful to investors focused on growth stocks, purchasing IPOs, or investing in technology or other "asset-lite" companies. SEE: Using The Price-To-Book Ratio To Evaluate Companies

Dollar Thrifty Automotive Group (NYSE:DTG) is up 3% to reach a current price of $78.00 per share. This morning, 994,141 shares have been traded, whereas yesterday, volume was only 520,862 shares. High volume indicates a lot of investor interest while low volume indicates the opposite. Understanding investment valuation ratios allows an investor to assess the true value of an individual stock. The debt-equity (D/E) ratio is a leverage ratio. DTG has a D/E ratio of 229%, which is relatively high. Companies with high D/E ratios may have difficulty attracting additional investment capital. The D/E ratio is not a pure measurement of a company's debt because it includes operational liabilities in total liabilities.

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.

comments powered by Disqus

Trading Center