Filed Under: ,
Tickers in this Article: FSLR, ATE, ASMI, EZCH, VECO, PSMI, DIOD
The Nasdaq is trading down 0.2%, the S&P 500 has moved little and the Dow has been relatively flat so far today.

While the market overall has shown little change, the Semiconductors sector (XLK) is up 0.1% and its current biggest movers are:
CompanyMarket CapPercentage Change
First Solar (Nasdaq:FSLR)$2.24 billion-5.6%
Advantest Corp (NYSE:ATE)$2.91 billion+4.7%
ASM International (Nasdaq:ASMI)$1.86 billion+3.5%
EZchip (Nasdaq:EZCH)$979.9 million-2%
Veeco Instruments (Nasdaq:VECO)$1.36 billion+1.8%
Peregrine Semiconductor Corp (Nasdaq:PSMI)$510.2 million-1.8%
Diodes (Nasdaq:DIOD)$846.8 million-1.6%
Forex Broker Summary: Forex Capital Markets (FXCM)

First Solar (Nasdaq:FSLR) has fallen 5.6% and is currently trading at $24.26 per share. This morning, the company is trading a volume of 3.7 million shares. Volume is used to evaluate how meaningful the price movement of a stock 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 is calculated by dividing total liabilities by total assets. FSLR has a low debt ratio of 38.7%. This indicates that the company engages in conservative financing with opportunities to borrow in the future at no significant risk. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.

After rising 4.7%, Advantest Corp (NYSE:ATE) is currently trading at a share price of $15.29. With 1,100 shares changing hands so far today, the company's volume is 0.2 times its average over the past three months. 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. 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. 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. ATE's P/S ratio of 1.53 is on the high side. This could be a good sign if the share price increases. 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.

ASM International (Nasdaq:ASMI) has increased to a share price of $35.02, a 3.5% rise. So far this morning, 9,300 shares have changed hands. This is 0.1 times its average daily volume. A stock's volume conveys how excited investors are about it. 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. 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 capitalizion ratio of 18.6% is on the low end. A very low capitalization ratio might be a sign that the company is stagnating and reducing the potential earnings for shareholders. 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.

At $34.30, EZchip (Nasdaq:EZCH) has slipped 2%. So far today, 229,029 shares have changed hands, while it was 901,517 shares yesterday. If a stock price moves on high volume, this means that the change is a significant one. Understanding investment valuation ratios allows an investor to assess the true value of an individual stock. 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. PEG ratio for EZCH is 4.66. Because of the adjustment for earnings growth rate, the PEG ratio is somewhat more useful than many formulas for comparing companies in different industries.

Increasing 1.8%, Veeco Instruments (Nasdaq:VECO) is trading at $35.29 per share. So far today, 248,088 shares have changed hands. 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. 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. VECO's P/B ratio of 1.73 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 has its shortcomings but is still widely used as a valuation metric, more relevant for use by investors looking at capital-intensive or finance-related businesses, such as banks; book value does not carry much meaning for service-based firms with few tangible assets. SEE: Using The Price-To-Book Ratio To Evaluate Companies

Peregrine Semiconductor Corp (Nasdaq:PSMI) is trading at $15.96 per share, down 1.8%. The company's volume for the day so far is 9,605 shares, 0.1 times the average volume over the last three months. Volume indicates the level of interest that investors have in a company at its current price.

Diodes (Nasdaq:DIOD) is currently trading at a share price of $18.11, a 1.6% decline. So far today, the company's volume is 44,548 shares. This is 0.2 times the average daily volume. If a stock price makes a big move up or down, volume lets us know the significance of that move. Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. Price/earnings ratios (P/E ratios) provide a measure of the relative value of a stock. DIOD has a P/E ratio of 35.4, high compared to the industry average of 13.66. This could mean that the market is expecting big things over the next few months or years. 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: Investment Valuation Ratios: Price/Earnings Ratio

The Bottom Line No matter the economic climate, Wall Street will always have stocks that make major moves each week. Paying close attention to the previous ratios will help you identify key times to adjust your strategy. 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