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Tickers in this Article: APAGF, NFLX, ROST, DECK, NTES, SSYS, ESGR
After this morning's trading, the Nasdaq is trading up 0.3%, the S&P 500 has declined 0.2% and the Dow has decreased 0.1%. Most stocks on the Nasdaq Composite Index are technology and Internet-related, but there are financial, consumer, bio-tech and industrial companies as well.

The biggest movers traded on the NASDAQ so far are:
CompanyMarket CapPercentage Change
Apco Oil & Gas International Inc. (Nasdaq:APAGF)$575.6 million+15.7%
Netflix (Nasdaq:NFLX)$4 billion+11.8%
Ross Stores (Nasdaq:ROST)$14.16 billion+6.8%
Deckers Outdoor Corp (Nasdaq:DECK)$1.7 billion+6.1% Inc (ADR) (Nasdaq:NTES)$7.63 billion+5.1%
Stratasys, Inc. (Nasdaq:SSYS)$1.09 billion+4.4%
Enstar Group Ltd. (Nasdaq:ESGR)$1.68 billion-3%
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Apco Oil & Gas International (Nasdaq:APAGF) is trading at $22.62 per share, a significant rise of 15.7%. The company's volume for the morning is 58,522 shares. This is 1.7 times its average daily volume. 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. 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. APAGF has a gross profit margin of 68%. The operating margin ratio can vary widely across industries, so investors should focus on comparing companies from similar industries or with similar business models. APAGF's operating profit margin of 16.8% is high relative to its gross profit margin. A high operating margin indicates a high margin of safety in an investment. A high net profit margin indicates a highly profitable company, and a low profit margin indicates the opposite. The company's net profit margin is 30.1%.

Understanding investment valuation ratios allows the investor to assess the true value of an individual stock. The debt-equity (D/E) ratio compares the total liabilities for a company to its total shareholder equity. The debt-equity ratio of 3% 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. The D/E ratio is not a pure measurement of a company's debt because it includes operational liabilities in total liabilities.

After a big jump of 11.8%, Netflix (Nasdaq:NFLX) is trading at $80.51 per share. The company's volume for the day so far is 6.6 million shares. 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. 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. NFLX's gross profit margin is 66.1%. The operating profit margin is a rough measure of the operating leverage a company can achieve in the conduct of the operational part of its business. NFLX has an operating profit margin of -0.2%. In other words, the company reported a net operating loss in the most recent quarter. Net profit margin compares net income with sales. The company has a net profit margin of 4.8%, high compared to its gross profit margin. Investors in companies with high profit margins can be confident that even if sales dip slightly, profits will remain strong.

While investment valuation ratios are useful tools in estimating the attractiveness of an investment, remember that it is important to look at a company's historical performance and compare the company ratios with its competitors and industry overall. Price/earnings ratios (P/E ratios) provide a measure of the relative value of a stock. NFLX has a P/E ratio of 24.3, high compared to the industry average of 0.85. 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: How To Use The P/E Ratio And PEG To Tell The Future Of A Stock

Increasing 6.8%, Ross (Nasdaq:ROST) is trading at $67.06 per share. The company's volume is currently two million shares for the day, which is less activity than yesterday's volume of 2.4 million shares. Volume is used to evaluate how meaningful the price movement of a stock is. Margin analysis is a great way to understand the profitability of companies. ROST has a gross profit margin of 29.4%. Compared with its gross profit margin, ROST's operating profit margin of 14.3% and net profit margin of 7.8% are low.

When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. As with most ratios, comparisons of company price/earnings to growth ratios (PEG ratios) are most appropriate for similar companies. ROST has a PEG ratio of 1.68, 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.

Deckers (Nasdaq:DECK) is at $46.87 per share after an increase of 6.1%. This morning, the company is trading a volume of 846,118 shares. This is 0.6 times the average volume over the last three months. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. 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. DECK's gross profit margin is 48.6%. The operating margin ratio can also be useful for tracking an individual company's performance across time, where an increasing ratio is good and a declining ratio may provide cause for concern that a company's business model is weakening. DECK's operating profit margin is 4.8%. Tracking net profit margin over time for a single company can be a valuable tool for seeing how a business is developing. Net margin is 13.2%.

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. 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. DECK has a P/B ratio of 2.18 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. 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: How Buybacks Warps The Price-To-Book Ratio

Rising 5.1%, Inc (Nasdaq:NTES) is currently trading at $61.66 per share. At 355,199 shares, the company's volume so far today is 0.5 times the average daily volume. High volume indicates a lot of investor interest while low volume indicates the opposite. Margin ratios highlight companies that are worth further examination. The gross profit margin for NTES is 73.9%. Investors in growth stocks or short-term traders may be less interested in the operating margin ratio. NTES' operating profit margin of 49.6% is low relative to its gross profit margin. Ideally, a company's profit margin should be stable or rising; declining profit margin should be cause for concern or further investigation. The company has a net profit margin of 44.9%.

Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. The price/sales ratio is used for spotting recovery situations or for double-checking that a company's growth has not become overvalued. NTES' P/S ratio of 8.58 is on the high side. This could be a good sign if the share price increases. 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 4.4%, Stratasys (Nasdaq:SSYS) is currently trading at a share price of $53.51. So far today, the company's volume is 223,743 shares. 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 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. 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. SSYS' gross profit margin is 58.8%. Operating margin provides a measure of a company's ability to pay its fixed costs such as interest on debt, particular if its business were to decline in the future. SSYS has an operating profit margin of 16.1%. While ratios such as price/earnings (P/E) or price/book value look at the relative attractiveness of a stock, the net profit margin ratio focuses on company performance rather that stock market valuation. Net profit margin for the company is 12.1%.

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 measures the leverage of a company, and a company's leverage is a good way to assess risk. SSYS has a debt ratio of 17.2%, which is fairly low. A low debt ratio means the company has more available cash flow. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.

At $98.41, Enstar (Nasdaq:ESGR) has slipped 3%. So far today, 8,060 shares have changed hands, lighter than yesterday's volume of 12,443 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. Investment valuation ratios can be very useful in estimating whether a stock price is too high, reasonable or a bargain investment opportunity. 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 14.8% 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. Prudent use of leverage (debt) increases the financial resources available to a company for growth and expansion.

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.

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