Currently, the Nasdaq has been relatively flat, the S&P 500 has increased 0.4% and the Dow is trading up 0.5%. The recent surge in popularity of technological stocks has launched the Nasdaq Composite Index into the spotlight, making it one of the premier indexes in the world.
The biggest movers traded on the NASDAQ so far are:
|Company||Market Cap||Percentage Change|
|Informatica (Nasdaq:INFA)||$3.65 billion||-26.7%|
|HMS (Nasdaq:HMSY)||$2.78 billion||-13.1%|
|International (Nasdaq:ISCA)||$1.32 billion||-11.6%|
|Sarepta Therapeutics (Nasdaq:SRPT)||$1.02 billion||-10.1%|
|Qlik Technologies (Nasdaq:QLIK)||$1.78 billion||-8.3%|
|Netflix (Nasdaq:NFLX)||$3.48 billion||+6%|
|Mattress (Nasdaq:MFRM)||$1.02 billion||+5.7%|
Beginner's Guide To Stockcharts.com
Taking a 26.7% hit, Informatica (Nasdaq:INFA) is currently trading at $24.65 per share. So far today, the company's volume is 12 million shares, 6.4 times the average daily volume. In technical analysis, trading volume is used to determine the strength of a market indicator. 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. While measuring a price/earnings ratio (P/E ratio) is a popular valuation technique, the measure cannot be calculated for companies without earnings, so some investors analyze the price/sales ratio. INFA's P/S ratio of 5.66 is on the high side. This could be a good sign if the share price increases. All things being equal, a low P/S ratio is good news for investors, while a very high one can be a warning sign.
Shares of HMS (Nasdaq:HMSY) are currently trading at $28.00, a steep decline of 13.1%. This morning, the company is trading a volume of 4.3 million shares. Volume is an important indicator because it indicates how significant a price shift is. Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. The debt ratio measures the leverage of a company, and a company's leverage is a good way to assess risk. HMSY has a debt ratio of 51.5%. 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.
International (Nasdaq:ISCA) is at a share price of $25.15 after a sharp decline of 11.6%. At 213,043 shares, the company's volume so far today is whereas yesterday, volume was only 126,044 shares. 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. Valuation ratios allow the investor to make a quick determination as to a company's investment value. 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. ISCA has a low debt-equity ratio of 24%. A low D/E ratio may be a sign that the company is not taking advantage of leverage to increase its profits. The D/E ratio percentage provides a much more dramatic perspective on a company's leverage position than the debt ratio percentage.
Sarepta Therapeutics (Nasdaq:SRPT) is currently trading at $40.38 per share, after a steep drop of 10.1%. The company's volume for the day so far is five million shares. This is 1.2 times its average volume over the past three months. A stock's volume conveys how excited investors are about it. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. 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 capitalizion ratio of 7.1% is on the low end. A low capitalization ratio can signify a failure to leverage equity into investment, missing valuable opportunities for growth and expansion. 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.
Slipping 8.3%, Qlik Technologies (Nasdaq:QLIK) is currently trading at $19.11 per share. The company's volume is currently 2.2 million shares for the day, 1.3 times the average daily volume. Volume indicates the level of interest that investors have in a company at its current price. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. Perhaps one of the most widely-used stock analysis tools is the price-to-earnings ratio, or P/E. QLIK has a P/E ratio of 260.5. 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: The P/E Ratio: A Good Market-Timing Indicator
Netflix (Nasdaq:NFLX) has increased to a share price of $66.36, a 6% rise. The company's volume for the day so far is seven million 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 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 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. NFLX's PEG ratio is 1.29. Because of the adjustment for earnings growth rate, the PEG ratio is somewhat more useful than many formulas for comparing companies in different industries.
After rising 5.7%, Mattress (Nasdaq:MFRM) is currently trading at a share price of $31.90. So far today, the company's volume is 2.2 million shares, which is more trading activity than there was yesterday. High volume indicates a lot of investor interest while low volume indicates the opposite. 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 price/book value ratio is calculated by dividing the current stock price by the company's book value per share. MFRM has a P/B ratio of 4.39 which shows that its share price is higher 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. One problem with the P/B value ratio is that it can be difficult to calculate the true book value of a company, so investors should be aware that many measures of book value may provide only a rough estimate, and should be taken with a grain of salt. SEE: Investment Valuation Ratios: Price/Book Value Ratio
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. Keep in mind that all these ratios should be compared against historical numbers and industry information in order to get a more complete picture.