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Avago Among Semiconductors' Biggest Movers on August 20, 2012

August 20, 2012 | Filed Under »
Tickers in this Article » KLIC, FSLR, VECO, AVGO, SPWR, NXPI, CAVM
The Nasdaq is down 0.2%, the S&P 500 has fallen 0.3% and the Dow has decreased 0.2%, marking a bad morning for the market.

The Semiconductors sector (XLK) is down 0.2%, outperforming the market overall. Currently, the biggest movers in the sector are:
CompanyMarket CapPercentage Change
Kulicke and Soffa Industries (Nasdaq:KLIC)$886.3 million-6.7%
First Solar (Nasdaq:FSLR)$1.85 billion+6.5%
Veeco Instruments (Nasdaq:VECO)$1.42 billion-6.2%
Avago (Nasdaq:AVGO)$9.02 billion-3.7%
SunPower (Nasdaq:SPWR)$548 million+3.5%
NXP (Nasdaq:NXPI)$6.46 billion-3.3%
Cavium (Nasdaq:CAVM)$1.64 billion-3%
Forex Broker Summary: Forex Capital Markets (FXCM)

Currently trading at $11.16 per share, Kulicke and Soffa Industries (Nasdaq:KLIC) has fallen 6.7%. The company is currently trading a volume of 750,739 shares. In technical analysis, trading volume is used to determine the strength of a market indicator. 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 price/book value ratio is calculated by dividing the current stock price by the company's book value per share. KLIC has a P/B ratio of 1.44 which shows that its share price is higher than its book value. This may be a sign that the company is overvalued. All else being equal, a stock with a low P/B value ratio is more attractive than a stock with a high ratio. SEE: Using The Price-To-Book Ratio To Evaluate Companies





Increasing 6.5%, First Solar (Nasdaq:FSLR) is trading at $22.65 per share. At 4.2 million shares, the company's volume so far today is. If a stock price makes a big move up or down, volume lets us know the significance of that move. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. 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. FSLR has a low capitalization ratio of 12.3%. Investors generally consider a company with low debt and high equity levels is a good quality investment. 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.



Falling 6.2%, Veeco Instruments (Nasdaq:VECO) is currently at a share price of $33.90. The company's volume for the morning is 405,364 shares. This is consistent with its current daily average. 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. Valuation ratios allow the investor to make a quick determination as to a company's investment value. Perhaps one of the most widely-used stock analysis tools is the price-to-earnings ratio, or P/E. VECO's P/E ratio of 17.5 is under the industry average of 28.09. 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. A high P/E ratio indicates a stock that is expensive, while a low P/E ratio indicates a stock that is cheap. SEE: How To Find P/E And PEG Ratios





Slipping 3.7%, Avago (Nasdaq:AVGO) is currently trading at $35.48 per share. The company's volume for the day so far is 1.1 million shares, consistent with its average over the last three months. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. The assumption with high price/earnings stocks (generally of the growth variety) is that investors are willing to buy at a high price because they believe that the stock has significant growth potential, and the price/earnings to growth (PEG) ratio helps investors determine the degree of reliability of that growth assumption. AVGO has a PEG ratio of 1.47, 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.



Rising 3.5%, SunPower (Nasdaq:SPWR) is currently trading at $4.77 per share. So far today, the company's volume is 432,182 shares. If a stock price moves on high volume, this means that the change is a significant one. 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. SPWR's debt ratio of 63.5% is fairly high. This means that the company's cash flow is significantly impacted by paying off principal and interest and that any negative change in performance or rise in interest rates could result in default. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.



After a decline of 3.3%, NXP (Nasdaq:NXPI) has hit a share price of $25.19. So far today, 938,517 shares have changed hands, consistent with the volume from yesterday on pace to finish the day below yesterday's volume of 2.1 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. 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. In a nutshell, the price/sales ratio shows how much Wall Street values every dollar of the company's sales. NXPI has a high P/S ratio of 1.42. This could be a good sign if the share price increases. All things being equal, a low P/S ratio is good news for investors, while a very high one can be a warning sign.



Cavium (Nasdaq:CAVM) is down 3% to reach $31.90 per share. So far this morning, 212,637 shares have changed hands. This is 0.2 times its average daily volume. The trading volume for a stock indicates the level of investor interest. 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 debt-equity (D/E) ratio compares the total liabilities for a company to its total shareholder equity. CAVM has a debt-equity ratio of 10%, which is on the low side. This shows that the company's assets are financed primarily through equity. 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. It is important to weigh current activity against historical performance when making any investment decisions. 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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