The market is currently up, with the Nasdaq increasing 0.6%, the S&P 500 moving up 0.5%, and the Dow rising 0.6%. 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:
|Company||Market Cap||Percentage Change|
|Choice Hotels International (NYSE:CHH)||$2.5 billion||-25.9%|
|Black (NYSE:BKH)||$1.37 billion||+7.8%|
|Watson Pharmaceuticals, Inc (NYSE:WPI)||$10.04 billion||+5.6%|
|Solera Holdings (NYSE:SLH)||$2.97 billion||-5.2%|
|HEICO (NYSE:HEI)||$2 billion||-3.5%|
|KB Financial Group, Inc (NYSE:KB)||$13 billion||-3.2%|
|3D (NYSE:DDD)||$2.32 billion||-2.6%|
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Taking a 25.9% hit, Choice Hotels International (NYSE:CHH) is currently trading at $32.01 per share. The company's volume for the morning is 299,567 shares. This is one times the current daily average. Volume is used to evaluate how meaningful the price movement of a stock is. Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. A company's capitalization (not to be confused with its market capitalization) is the term used to describe the makeup of a company's permanent or long-term capital, which consists of both long-term debt and shareholders' equity. The capitalization ratio for CHH is 101.8%, which is fairly high. A company considered too highly leveraged (too much debt) may find its freedom of action restricted by its creditors and/or have its profitability hurt by high interest costs. 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.
Black (NYSE:BKH) has moved up 7.8% and is currently trading at $33.43 per share. At 1.1 million shares, the company's volume so far today is 2.8 times the current three-month average. Volume indicates the level of interest that investors have in a company at its current price. Investment valuation ratios can be very useful in estimating whether a stock price is too high, reasonable or a bargain investment opportunity. There are generally two price/earnings ratios calculated: the first, called the trailing Price/Earnings ratio, is calculated using the previous years actual earnings; the second, called forward Price/Earnings ratio, is calculated using the next year's estimated earnings. BKH's P/E ratio of 25.6 is above the industry average of 3.12. Usually, if a stock has a high P/E ratio, it indicates that the market expects the company to grow earnings quickly in the future. 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
After rising 5.6%, Watson Pharmaceuticals, Inc (NYSE:WPI) is currently trading at a share price of $83.04. This morning, the company is trading a volume of 1.4 million shares. The trading volume for a stock indicates the level of investor 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. The price/earnings to growth (PEG) ratio is calculated by dividing the price/earnings ratio by growth in earnings-per-share; the lower the PEG ratio, the more reasonably valued the security. WPI's PEG ratio is 4.95. Because of the adjustment for earnings growth rate, the PEG ratio is somewhat more useful than many formulas for comparing companies in different industries.
Solera Holdings (NYSE:SLH) is down 5.2% to reach $40.48 per share. So far today, the company's volume is 593,765 shares,. When a stock price moves up or down, watching the volume is a good way of identifying how significant that shift is. 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 debt ratio measures the leverage of a company, and a company's leverage is a good way to assess risk. SLH has a debt ratio of 64.4%, which is on the high side. 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.
HEICO (NYSE:HEI) is trading at $36.56 per share, down 3.5%. The company's volume for the day so far is 123,525 shares. This is in keeping with its current daily average. 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 dividend yield is measured by taking the annual dividends per share and dividing that number by the stock price. The dividend yield for HEI is 0.3%, which is on the low end. This could indicate that that the stock is overpriced or that future dividends might be higher. It is important to remember that while a higher dividend yield is more attractive, all else being equal, a higher dividend yield can also indicate greater perceived risk. SEE: Dividend Yield For The Downturn
KB Financial Group, Inc (NYSE:KB) is currently trading at a share price of $32.55, a 3.2% decline. The company's volume is currently 37,498 shares for the day, in keeping with its current three-month average. Volume is an important indicator because it indicates how significant a price shift is. 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 value by its total revenues or alternatively, a company's price per share by its revenue per share. KB has a low P/S ratio of 0.92. Low P/S ratios can indicate unrecognized value potential - so long as other criteria like high profit margins, low debt levels and growth prospects are in place. 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.
3D (NYSE:DDD) has decreased to $40.84 per share, a 2.6% fall. The company's volume for the day so far is 505,348 shares. If a stock price moves on high volume, this means that the change is a significant one. 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 is calculated by dividing the current stock price by the company's book value per share. DDD's P/B ratio of 5.89 shows that its share price is higher than its book value. This may be a sign that the company is overvalued. A weakness of the P/B value ratio is that while the price component is easily determined by looking at the stock quote, the book value component is more difficult to estimate and more open to individual interpretation and analysis. SEE: How Buybacks Warps The Price-To-Book Ratio
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.