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Tickers in this Article: CWEI, NOV, CXO, APC, OIS, EOG, APA
The Nasdaq is trading up 0.8%, the S&P 500 is up 0.8% and the Dow has increased 0.9% on a good day for the market so far. The energy sector is the category of stocks that relate to producing or supplying energy. This sector includes companies involved in the exploration and development of oil or gas reserves, oil and gas drilling, or integrated power firms. Performance in the sector is largely driven by the supply and demand for worldwide energy. Energy producers will do very well during times of high oil and gas prices, but will earn less when the value of energy drops. Furthermore, this sector is sensitive to political events, which historically have driven changes in the price of oil.

The Energy sector (XLE) is up 1.3%, outperforming the market overall. The biggest movers in the sector so far are:
CompanyMarket CapPercentage Change
Clayton Williams Energy (Nasdaq:CWEI)$574.6 million+3.4%
National Oilwell (NYSE:NOV)$32.49 billion+3.1%
Concho Resources (NYSE:CXO)$9.19 billion+2.7%
Anadarko (NYSE:APC)$34.11 billion+2.6%
Oil States International (NYSE:OIS)$4.2 billion+2.5%
EOG (NYSE:EOG)$28.59 billion+2.3%
Apache (NYSE:APA)$33.29 billion+2.1%
Forex Broker Summary: UFXMarkets

Clayton Williams Energy (Nasdaq:CWEI) has increased to a share price of $48.85, a 3.4% rise. So far today, 6,589 shares have changed hands, which is likely to result in less activity than yesterday's volume of 47,548 shares. Volume is used to evaluate how meaningful the price movement of a stock is. 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. The P/E ratio for CWEI is 5.8, below the industry average of 14.85. A low P/E might arise due to substantial inherent risk of the firm and its operations, poor return on equity, or improper valuation of the market. From the investor's perspective, a stock with a lower ratio is relatively cheaper than a stock with a higher ratio. SEE: Investment Valuation Ratios: Price/Earnings Ratio

National Oilwell (NYSE:NOV) is up 3.1% to reach a current price of $78.57 per share. So far today, 1.2 million shares have changed hands. This is in keeping with the average volume over the past three months. If a stock price makes a big move up or down, volume lets us know the significance of that move. Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. 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. NOV's PEG ratio of 1.4 is in line with the industry average. While P/E ratios are important indicators of market value, a high P/E in and of itself is not bad because it may indicate a company whose earnings are growing very rapidly, so many investors look at the PEG ratio in order to get an idea of whether or not a particular P/E ratio is justified by underlying earnings growth.

Concho Resources (NYSE:CXO) has risen 2.7% to hit a current price of $90.50 per share. This morning, the company is trading a volume of 278,533 shares. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. One of the favorite tools of many value investors is analyzing price/book value ratios, as it provides a measure of the underlying value of a company's assets as compared to the valuation of its equity. CXO has a P/B ratio of 2.81 which shows that its share price is higher than its book value. This implies that investors expect management to create more value from a given set of assets and/or that the market value of the firm's assets is significantly higher than their accounting value. 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: How Buybacks Warps The Price-To-Book Ratio

Anadarko (NYSE:APC) is currently trading at $70.03 per share, a 2.6% increase. At 1.1 million shares, the company's volume so far today is consistent with its 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. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. The dividend yield is measured by taking the annual dividends per share and dividing that number by the stock price. APC has a low dividend yield of 0.5%. This may indicate that the company's stock is overpriced. A stock's dividend yield depends on the nature of a company's business, its posture in the marketplace (value or growth oriented), its earnings and cash flow, and its dividend policy. SEE: Investment Valuation Ratios: Dividend Yield

After an increase of 2.5%, Oil States International (NYSE:OIS) has reached a current price of $78.68. So far today, 71,700 shares of the company's stock have changed hands. This is a sign that there will be less trading activity than there was yesterday. 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. Looking at a company's valuation ratios is a good way of getting a basic idea as to its value as an investment. A price/sales ratio is derived by dividing stock market price by company sales. OIS has a low P/S ratio of 0.84. Highly levered companies are likely to have lower P/S ratios because the price aspect of this ratio only measures stock market valuation while sales is a function of both stock market and bond market capitalization. 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.

EOG (NYSE:EOG) has risen 2.3% and is currently trading at $108.30 per share. With 552,615 shares changing hands so far today, the company's volume is 0.4 times the current three-month average. 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 gives users a quick measure of the amount of debt that the company has on its balance sheets compared to its assets. EOG has a low debt ratio of 48.6%. 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.

Apache (NYSE:APA) has increased to a share price of $86.84, a 2.1% rise. The company is currently trading a volume of 553,476 shares. 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. The debt-equity (D/E) ratio compares the total liabilities for a company to its total shareholder equity. The debt-equity ratio of 33% 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.

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.

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