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ASML Holding N.V. (ADR) and More Big Movers in Semiconductors Today
The Nasdaq is trading up 0.5%, the S&P 500 has increased 0.3% and the Dow has climbed 0.3%, marking a bad morning for the market.
The Semiconductors sector (XLK) is up 0.2%, underperforming the market overall. The biggest movers in the sector are currently:
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After a decline of 3.3%, First Solar (Nasdaq:FSLR) has hit a share price of $19.82. The company's volume is currently 2.5 million shares for the day, 0.2 times the 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. 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. To a large degree, the debt-equity (D/E) ratio provides another vantage point on a company's leverage position, in this case, comparing total liabilities to shareholders' equity, as opposed to total assets in the debt ratio. The debt-equity ratio of 15% 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 percentage provides a much more dramatic perspective on a company's leverage position than the debt ratio percentage.
After an increase of 2.3%, NXP (Nasdaq:NXPI) has reached a current price of $24.55. This morning, the company is trading a volume of 526,364 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. 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 is calculated by dividing the current stock price by the company's book value per share. NXPI's P/B ratio of 5.99 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. Users need to be careful when applying this ratio though, as it is more useful for industrial companies that have a lot of tangible assets than it is for technology or consumer product companies that may not have much in the way of hard assets. SEE: Using The Price-To-Book Ratio To Evaluate Companies
Spreadtrum Communications, Inc (Nasdaq:SPRD) is currently trading at a share price of $17.42, a 2.1% decline. The company's volume is currently 425,503 shares for the day, 0.3 times the average volume over the last three months. If a stock price makes a big move up or down, volume lets us know the significance of that move. Looking at a company's valuation ratios is a good way of getting a basic idea as to its value as an investment. Using price/earnings ratios (P/E ratios) does not give an indication of whether or not an individual company's ratio is reasonable, a shortcoming that can be corrected by using the price/earnings to growth ratio (PEG ratio). SPRD has a PEG ratio of 0.27, 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.
Cirrus Logic (Nasdaq:CRUS) has increased to a share price of $39.14, a 2.1% rise. The company's volume is currently 1.5 million shares. Volume is an important indicator because it indicates how significant a price shift is. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. 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. CRUS has a high P/S ratio of 4.45. In young companies, a high P/S ratio is a sign of sales growth that is expected to turn into earnings and cash flow. 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.
Monolithic Power Systems (Nasdaq:MPWR) has moved up 1.4% and is currently trading at $21.05 per share. The company's volume is currently 186,062 shares for the day, 0.3 times the current daily average. Volume is an important indicator because it indicates how significant a price shift is. Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. 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. MPWR has a low debt ratio of 13.2%. 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.
Power Integrations (Nasdaq:POWI) has risen 1.3% and is currently trading at $34.13 per share. The company is currently trading a volume of 71,960 shares. Volume is used to evaluate how meaningful the price movement of a stock is. Understanding investment valuation ratios allows an investor to assess the true value of an individual stock. Dividend yield is a way to measure how much cash flow you are getting for each dollar invested in an equity position - in other words, how much "bang for your buck" you are getting from dividends. The dividend yield for POWI is 0.6%, which is on the low end. If you are an income investor, this stock may not be attractive to you. A higher dividend yield may indicate a risk of a fall in the price of the security, or a cut in the level of dividend payments, either of which would have the effect of dropping future returns. SEE: Dividend Yield For The Downturn
After rising 1.2%, ASML Holding N.V (Nasdaq:ASML) is currently trading at a share price of $57.78. The company's volume for the day so far is 654,813 shares, 0.3 times the current three-month average. High volume indicates a lot of investor interest while low volume indicates the opposite. Valuation ratios allow the investor to make a quick determination as to a company's investment value. 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. ASML has a low capitalization ratio of 15.7%. A very low capitalization ratio might be a sign that the company is stagnating and reducing the potential earnings for shareholders. 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.
The Bottom Line The nature of the market is such that stocks will have good days and bad days. Daily stock performance should be weighed against historical performance and put in context of the market overall. Keep in mind that all these ratios should be compared against historical numbers and industry information in order to get a more complete picture.
The Semiconductors sector (XLK) is up 0.2%, underperforming the market overall. The biggest movers in the sector are currently:
| Company | Market Cap | Percentage Change |
| First Solar (Nasdaq:FSLR) | $1.78 billion | -3.3% |
| NXP Semiconductors NV (Nasdaq:NXPI) | $5.95 billion | +2.3% |
| Spreadtrum Communications, Inc (ADR) (Nasdaq:SPRD) | $836.5 million | -2.1% |
| Cirrus Logic, Inc. (Nasdaq:CRUS) | $2.48 billion | +2.1% |
| Monolithic Power Systems, Inc. (Nasdaq:MPWR) | $723 million | +1.4% |
| Power Integrations, Inc. (Nasdaq:POWI) | $971.4 million | +1.3% |
| ASML Holding N.V. (ADR) (Nasdaq:ASML) | $23.3 billion | +1.2% |
After a decline of 3.3%, First Solar (Nasdaq:FSLR) has hit a share price of $19.82. The company's volume is currently 2.5 million shares for the day, 0.2 times the 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. 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. To a large degree, the debt-equity (D/E) ratio provides another vantage point on a company's leverage position, in this case, comparing total liabilities to shareholders' equity, as opposed to total assets in the debt ratio. The debt-equity ratio of 15% 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 percentage provides a much more dramatic perspective on a company's leverage position than the debt ratio percentage.
After an increase of 2.3%, NXP (Nasdaq:NXPI) has reached a current price of $24.55. This morning, the company is trading a volume of 526,364 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. 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 is calculated by dividing the current stock price by the company's book value per share. NXPI's P/B ratio of 5.99 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. Users need to be careful when applying this ratio though, as it is more useful for industrial companies that have a lot of tangible assets than it is for technology or consumer product companies that may not have much in the way of hard assets. SEE: Using The Price-To-Book Ratio To Evaluate Companies
Spreadtrum Communications, Inc (Nasdaq:SPRD) is currently trading at a share price of $17.42, a 2.1% decline. The company's volume is currently 425,503 shares for the day, 0.3 times the average volume over the last three months. If a stock price makes a big move up or down, volume lets us know the significance of that move. Looking at a company's valuation ratios is a good way of getting a basic idea as to its value as an investment. Using price/earnings ratios (P/E ratios) does not give an indication of whether or not an individual company's ratio is reasonable, a shortcoming that can be corrected by using the price/earnings to growth ratio (PEG ratio). SPRD has a PEG ratio of 0.27, 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.
Monolithic Power Systems (Nasdaq:MPWR) has moved up 1.4% and is currently trading at $21.05 per share. The company's volume is currently 186,062 shares for the day, 0.3 times the current daily average. Volume is an important indicator because it indicates how significant a price shift is. Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. 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. MPWR has a low debt ratio of 13.2%. 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.
Power Integrations (Nasdaq:POWI) has risen 1.3% and is currently trading at $34.13 per share. The company is currently trading a volume of 71,960 shares. Volume is used to evaluate how meaningful the price movement of a stock is. Understanding investment valuation ratios allows an investor to assess the true value of an individual stock. Dividend yield is a way to measure how much cash flow you are getting for each dollar invested in an equity position - in other words, how much "bang for your buck" you are getting from dividends. The dividend yield for POWI is 0.6%, which is on the low end. If you are an income investor, this stock may not be attractive to you. A higher dividend yield may indicate a risk of a fall in the price of the security, or a cut in the level of dividend payments, either of which would have the effect of dropping future returns. SEE: Dividend Yield For The Downturn
After rising 1.2%, ASML Holding N.V (Nasdaq:ASML) is currently trading at a share price of $57.78. The company's volume for the day so far is 654,813 shares, 0.3 times the current three-month average. High volume indicates a lot of investor interest while low volume indicates the opposite. Valuation ratios allow the investor to make a quick determination as to a company's investment value. 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. ASML has a low capitalization ratio of 15.7%. A very low capitalization ratio might be a sign that the company is stagnating and reducing the potential earnings for shareholders. 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.
The Bottom Line The nature of the market is such that stocks will have good days and bad days. Daily stock performance should be weighed against historical performance and put in context of the market overall. Keep in mind that all these ratios should be compared against historical numbers and industry information in order to get a more complete picture.
by
Investopedia Staff
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