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Tickers in this Article: TAHO, CYH, HCA, WCG, WLP, LNN, VMW
This morning has been rocky for the market. The Nasdaq has declined 1.5%; the S&P 500 is trading down 0.9%; and the Dow has fallen 1%. 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:
CompanyMarket CapPercentage Change
Community Health Systems (NYSE:CYH)$2.34 billion+10.9%
HCA Holdings (NYSE:HCA)$11.68 billion+9.2%
WellCare Health Plans, Inc. (NYSE:WCG)$2.14 billion+8.9%
WellPoint (NYSE:WLP)$22.99 billion-7.1%
Lindsay Corporation (NYSE:LNN)$786.7 million+5.4%
VMware (NYSE:VMW)$37.88 billion-4%
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So far today, the company's volume is 4.9 million shares, more than yesterday's 83,778 shares. A stock's volume conveys how excited investors are about it. 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. The price/book value ratio is especially important for value investors as it can provide an indication of the true value of a company's assets at a time when its business model may be failing. TAHO's P/B ratio of 1.82 shows that its share price is higher than its book value. It is important to take the company's debt into account when using the P/B ratio as debt can boost a company's liabilities to the point where they wipe out much of the book value of its hard assets, creating artificially high P/B values. 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

Community Health (NYSE:CYH) is trading at $28.27 per share, a significant rise of 10.9%. The company is currently trading a volume of 4.5 million shares. This is three 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. 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. The gross profit margin for CYH is 64.8%. Compared with its gross profit margin, CYH's operating profit margin of 10.6% and net profit margin of 2.2% are high.

It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. A price/sales ratio is derived by dividing stock market price by company sales. CYH has a P/S ratio of 0.15, on the low end. A company with a lower P/S ratio is generally considered more attractive, since investors are paying less for each dollar of sales. 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.

HCA (NYSE:HCA) is at $29.05 per share after an increase of 9.2%. The company is currently trading a volume of 13.9 million 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. Calculating the profit margin is a great way to gain insight into aspects of how well a company generates and retains money. Instead of measuring how much managers earn from assets, equity or invested capital, profit-margin ratios measure how far a company stretches its total revenue or total sales. HCA's gross profit margin of 83.3% is fairly high. A high gross profit margin generally means that the company can make a reasonable profit on sales, provided that overhead costs do not increase. HCA has an operating profit margin of 16.7% and a net profit margin of 8.8%, both high compared to its gross profit margin.

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 debt ratio is calculated by dividing total liabilities by total assets. HCA has a debt ratio of 131.7%, which is on the high side. As such, the company is highly leveraged and not highly liquid. 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.

After an increase of 8.9%, WellCare Health Plans (NYSE:WCG) has reached a current price of $54.01. The company's volume is currently 2.9 million shares for the day, 3.5 times the current daily 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. 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 debt-equity (D/E) ratio compares the total liabilities for a company to its total shareholder equity. WCG has a debt-equity ratio of 12%, which is on the low side. This shows that the company's assets are financed primarily through equity. This easy-to-calculate ratio provides a general indication of a company's equity-liability relationship and is helpful to investors looking for a quick take on a company's leverage.

WellPoint (NYSE:WLP) has decreased to $64.57 per share, a 7.1% fall. The company is trading at a volume of 10.6 million shares. Yesterday's volume was only 3.7 million shares. Volume is an important indicator because it indicates how significant a price shift is. 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 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 26.5% 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. This ratio is considered to be one of the more meaningful of the "debt" ratios - it delivers the key insight into the use of leverage by a company.

Lindsay (NYSE:LNN) is up 5.4% to reach a current price of $65.25 per share. With 165,301 shares changing hands so far today, the company's volume is 0.7 times its average over the past three months. Volume is used to evaluate how meaningful the price movement of a stock is. Profit-margin ratios can give investors deeper insight into management efficiency than earnings alone can provide. Gross profit margin, operating profit margin and net margin are commonly used margins. LNN has a gross profit margin of 28.9%. Relative to its gross profit margin, LNN's operating profit margin of 14.3% and net profit margin of 7.1% are low.

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. A simple P/E ratio can reveal the stock's real market value and show how the valuation compares to its industry group or a benchmark like the S&P 500 Index. LNN has a P/E ratio of 19.5, high compared to the industry average of 11.49. 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

Slipping 4%, VMware (NYSE:VMW) is currently trading at $85.16 per share. So far today, 1.1 million shares have changed hands. The trading volume for a stock indicates the level of investor interest. Margin analysis is a great way to understand the profitability of companies. VMW has a gross profit margin of 91.9%, which is on the high end. Investors should track gross profit margin ratios over several years in order to see if earnings are consistent, growing or declining. VMW's operating margin of 20.6% and net margin of 19.8% are high relative to its gross margin.

Understanding investment valuation ratios allows the investor to assess the true 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. VMW has a PEG ratio of 1.9. Because of the adjustment for earnings growth rate, the PEG ratio is somewhat more useful than many formulas for comparing companies in different industries.

The Bottom Line On any given day, a particular stock may see positive or negative change in its share price. Paying close attention to the previous ratios will help you identify key times to adjust your strategy. Tools like valuation ratios and profit margins, however, are only as useful as the context you put them in; remember to take historical data and competitor performance into account.

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