Filed Under: ,
Tickers in this Article: ADSK, MCRS, CPSI, SLH, SSYS, SOHU, IDCC
The market has been doing well after the morning's trading. The Nasdaq is up 0.6%; the S&P 500 is trading up 0.5%; and the Dow has climbed 0.6%. The technology sector is a category of stocks relating to the research, development and/or distribution of technologically based goods and services. This sector contains businesses revolving around the manufacturing of electronics, creation of software, computers or products and services relating to information technology. The technology sector offers a wide arrange of products and services for both customers and other businesses. Consumer goods like personal computers, stereos and televisions are continually improved and upgraded, offering the latest technology to all users. Businesses receive information and services from software and database systems, which allow the companies to make strategic business decisions.

Underperforming the market overall, the Technology sector (XLK) is up 0.4%, and these are its current biggest movers:
CompanyMarket CapPercentage Change
Autodesk (Nasdaq:ADSK)$8.21 billion-15.8%
MICROS Systems (Nasdaq:MCRS)$3.87 billion+8.8%
Computer Programs & Systems (Nasdaq:CPSI)$517.7 million+5.5%
Solera Holdings (NYSE:SLH)$2.97 billion-5.2%
Stratasys (Nasdaq:SSYS)$1.44 billion-5% (Nasdaq:SOHU)$1.59 billion+4.5%
InterDigital (Nasdaq:IDCC)$1.38 billion+4.2%
Investopedia Markets: Explore the best one-stop source for financial news

After a precipitous drop of 15.8%, Autodesk (Nasdaq:ADSK) is now trading at a share price of $30.06. So far today, the company's volume is 21 million shares, 7.8 times the current daily average. A stock's volume conveys how excited investors are about it. Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. The easy-to-calculate debt ratio is helpful to investors looking for a quick take on the leverage for a company. ADSK has a debt ratio of 38.3%, 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.

Increasing 8.8%, MICROS Systems (Nasdaq:MCRS) is trading at $52.46 per share. The company's volume for the day so far is 920,918 shares. If a stock price moves on high volume, this means that the change is a significant one. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. 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). MCRS has a PEG ratio of 1.66, which is consistent 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.

Computer Programs & Systems (Nasdaq:CPSI) has increased to a share price of $49.37, a 5.5% rise. So far today, the company's volume is 119,624 shares,. High volume indicates a lot of investor interest while low volume indicates the opposite. 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. The price/book value ratio is one of the more common methods of determining whether a stock is fairly valued. CPSI has a P/B ratio of 8.86 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. 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

Solera Holdings (NYSE:SLH) is currently trading at a share price of $40.48, a 5.2% decline. The company is currently trading a volume of 593,765 shares. This is 1.4 times the current three-month average. Volume is an important indicator because it indicates how significant a price shift is. Valuation ratios allow the investor to make a quick determination as to a company's investment value. Price/earnings ratios (P/E ratios) provide a measure of the relative value of a stock. SLH's P/E ratio of 28.8 is under the industry average of 374.68. A low P/E ratio may indicate that the market expects relatively slower earnings growth. High P/E stocks could be "growth" stocks, while low PE stocks may be "value" stocks. SEE: Profit With The Power Of Price-To-Earnings

Stratasys (Nasdaq:SSYS) has decreased to $64.14 per share, a 5% fall. So far today, the company's volume is 413,088 shares, 0.9 times the average daily volume. When a stock price moves up or down, watching the volume is a good way of identifying how significant that shift is. Understanding investment valuation ratios allows an investor to assess the true value of an individual stock. In a nutshell, the price/sales ratio shows how much Wall Street values every dollar of the company's sales. SSYS' P/S ratio of 5.92 is on the high side. This could be a good sign if the share price increases. A limitation of the P/S ratio is that the price component measures only stock market captialization, while sales are a function of the entire capital structure, potentially leading to wide differences between levered and unlevered companies.

After an increase of 4.5%, (Nasdaq:SOHU) has reached a current price of $43.71. The company is currently trading a volume of 1.5 million 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. 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 debt ratio shows the proportion of assets that a company is financing through debt. The debt ratio for SOHU is a low 40.3%. This indicates that the company engages in conservative financing with opportunities to borrow in the future at no significant risk. 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.

InterDigital (Nasdaq:IDCC) is up 4.2% to reach a current price of $33.64 per share. The company's volume is currently 255,126 shares for the day,. 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. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. The debt-equity (D/E) ratio is a measurement of how much suppliers, lenders, creditors and obligors have committed to the company versus what the shareholders have committed. The debt-equity ratio of 48% is relatively low. A low D/E ratio may be a sign that the company is not taking advantage of leverage to increase its profits. 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.

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. 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