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Biggest Financial Sector Movers for July 23, 2012, Including SHG
The market is currently down, with the Nasdaq decreasing 1.9%, the S&P 500 down 1.3% and the Dow slipping 1.1%. The financial sector is the category of stocks containing firms that provide financial services to commercial and retail customers. This sector includes banks, investment funds, insurance companies and real estate. Financial services perform best in low interest rate environments. A large portion of this sector generates revenue from mortgages and loans, which gain value as interest rates drop. Furthermore, when the business cycle is in an upswing, the financial sector benefits from additional investments. Improved economic conditions usually lead to more capital projects and increased personal investing. New projects require financing, which usually leads to a larger number of loans.
The Financial sector (XLF) is down 1.5%, outperforming the market overall. Currently, the biggest movers in the sector are:
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Shinhan Financial Group Co., Ltd (NYSE:SHG) has decreased to $58.41 per share, a 5.7% fall. The company's volume for the day so far is 8,107 shares. This is 0.3 times the current daily average. Volume is an important indicator in technical analysis as it is used to measure the worth of a market move. If the markets have made a strong price move either up or down the perceived strength of that move depends on the volume for that period. The higher the volume during that price move the more significant the move. 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 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. SHG has a capitalization ratio of 71.1%, which is on the high end. The company may have trouble meeting operating and debt liabilities on time and surviving adverse economic conditions. A low level of debt and a healthy proportion of equity in a company's capital structure is an indication of financial fitness.
Currently trading at $75.26 per share, Virtus Investment Partners (Nasdaq:VRTS) has fallen 3.7%. So far today, the company's volume is 2,481 shares, lighter than yesterday's volume of 24,694 shares. A stock's volume conveys how excited investors are about it. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. Price/earnings ratios (P/E ratios) provide a measure of the relative value of a stock. VRTS' P/E ratio of 4.8 falls below the industry average of 16.14. Companies with low P/E ratios may find it easier to surprise the market to the upside, even if their financial performance is not as strong as that of companies with high P/E ratios. 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: Can Investors Trust the P/E Ratio?
BlackRock (NYSE:BLK) is currently trading at a share price of $167.27, a 3.5% decline. The company is currently trading a volume of 478,109 shares. In technical analysis, trading volume is used to determine the strength of a market indicator. 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. As with most ratios, comparisons of company price/earnings to growth ratios (PEG ratios) are most appropriate for similar companies. BLK has a PEG ratio of 1.0, 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.
RPX (Nasdaq:RPXC) has increased to a share price of $13.59, a 3% rise. With 74,593 shares changing hands so far today, the company's volume is 0.7 times the average volume over the last 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. 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. The price/book value ratio, often expressed simply as "price-to-book", provides investors a way to compare the market value, or what they are paying for each share, to a conservative measure of the value of the firm. RPXC's stock is trading for more than its book value with a P/B ratio of 2.16. 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. One problem with the P/B value ratio is that it can be difficult to calculate the true book value of a company, so investors should be aware that many measures of book value may provide only a rough estimate, and should be taken with a grain of salt. SEE: How Buybacks Warps The Price-To-Book Ratio
Slipping 2.9%, Affiliated Managers Group (NYSE:AMG) is currently trading at $104.48 per share. The company's volume for the morning is 115,869 shares. This is 0.4 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. Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. 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. AMG has a low debt-equity ratio of 13%. This shows that the company's assets are financed primarily through equity. 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.
Goldman Sachs (NYSE:GS) is down 2.8% to reach $91.48 per share. At 1.8 million shares, the company's volume so far today is which is likely to result in less activity than yesterday's volume of 5.5 million shares. If a stock price makes a big move up or down, volume lets us know the significance of that move. Understanding investment valuation ratios allows an investor to assess the true value of an individual stock. A price/sales ratio is derived by dividing stock market price by company sales. The P/S ratio for GS is 1.39, which is relatively high. 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.
National Western Life Insurance (Nasdaq:NWLI) is trading at $138 per share, down 2.3%. The company's volume for the day so far is 1,500 shares. Volume is used to evaluate how meaningful the price movement of a stock is. Looking at a company's valuation ratios is a good way of getting a basic idea as to its value as an investment. A company's price/earnings ratio (P/E ratio) provides a measure of how expensive or cheap a stock is. The P/E ratio for NWLI is 8.7, below the industry average of 11.81. 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 or low P/E ratio is not good or bad in and of itself, but a company trading with a high P/E ratio must continue to post strong financial performance or its stock price is likely to fall. SEE: Profit With The Power Of Price-To-Earnings
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. 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.
The Financial sector (XLF) is down 1.5%, outperforming the market overall. Currently, the biggest movers in the sector are:
| Company | Market Cap | Percentage Change |
| Shinhan Financial Group Co., Ltd. (ADR) (NYSE:SHG) | $14.68 billion | -5.7% |
| Virtus Investment Partners Inc (Nasdaq:VRTS) | $608.9 million | -3.7% |
| BlackRock (NYSE:BLK) | $31.12 billion | -3.5% |
| RPX Corp (Nasdaq:RPXC) | $661.8 million | +3% |
| Affiliated Managers Group, Inc. (NYSE:AMG) | $5.53 billion | -2.9% |
| Goldman Sachs Group (NYSE:GS) | $46.32 billion | -2.8% |
| National Western Life Insurance Company (Nasdaq:NWLI) | $513.2 million | -2.3% |
Shinhan Financial Group Co., Ltd (NYSE:SHG) has decreased to $58.41 per share, a 5.7% fall. The company's volume for the day so far is 8,107 shares. This is 0.3 times the current daily average. Volume is an important indicator in technical analysis as it is used to measure the worth of a market move. If the markets have made a strong price move either up or down the perceived strength of that move depends on the volume for that period. The higher the volume during that price move the more significant the move. 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 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. SHG has a capitalization ratio of 71.1%, which is on the high end. The company may have trouble meeting operating and debt liabilities on time and surviving adverse economic conditions. A low level of debt and a healthy proportion of equity in a company's capital structure is an indication of financial fitness.
Currently trading at $75.26 per share, Virtus Investment Partners (Nasdaq:VRTS) has fallen 3.7%. So far today, the company's volume is 2,481 shares, lighter than yesterday's volume of 24,694 shares. A stock's volume conveys how excited investors are about it. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. Price/earnings ratios (P/E ratios) provide a measure of the relative value of a stock. VRTS' P/E ratio of 4.8 falls below the industry average of 16.14. Companies with low P/E ratios may find it easier to surprise the market to the upside, even if their financial performance is not as strong as that of companies with high P/E ratios. 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: Can Investors Trust the P/E Ratio?
BlackRock (NYSE:BLK) is currently trading at a share price of $167.27, a 3.5% decline. The company is currently trading a volume of 478,109 shares. In technical analysis, trading volume is used to determine the strength of a market indicator. 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. As with most ratios, comparisons of company price/earnings to growth ratios (PEG ratios) are most appropriate for similar companies. BLK has a PEG ratio of 1.0, 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.
RPX (Nasdaq:RPXC) has increased to a share price of $13.59, a 3% rise. With 74,593 shares changing hands so far today, the company's volume is 0.7 times the average volume over the last 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. 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. The price/book value ratio, often expressed simply as "price-to-book", provides investors a way to compare the market value, or what they are paying for each share, to a conservative measure of the value of the firm. RPXC's stock is trading for more than its book value with a P/B ratio of 2.16. 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. One problem with the P/B value ratio is that it can be difficult to calculate the true book value of a company, so investors should be aware that many measures of book value may provide only a rough estimate, and should be taken with a grain of salt. SEE: How Buybacks Warps The Price-To-Book Ratio
Slipping 2.9%, Affiliated Managers Group (NYSE:AMG) is currently trading at $104.48 per share. The company's volume for the morning is 115,869 shares. This is 0.4 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. Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. 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. AMG has a low debt-equity ratio of 13%. This shows that the company's assets are financed primarily through equity. 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.
Goldman Sachs (NYSE:GS) is down 2.8% to reach $91.48 per share. At 1.8 million shares, the company's volume so far today is which is likely to result in less activity than yesterday's volume of 5.5 million shares. If a stock price makes a big move up or down, volume lets us know the significance of that move. Understanding investment valuation ratios allows an investor to assess the true value of an individual stock. A price/sales ratio is derived by dividing stock market price by company sales. The P/S ratio for GS is 1.39, which is relatively high. 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.
National Western Life Insurance (Nasdaq:NWLI) is trading at $138 per share, down 2.3%. The company's volume for the day so far is 1,500 shares. Volume is used to evaluate how meaningful the price movement of a stock is. Looking at a company's valuation ratios is a good way of getting a basic idea as to its value as an investment. A company's price/earnings ratio (P/E ratio) provides a measure of how expensive or cheap a stock is. The P/E ratio for NWLI is 8.7, below the industry average of 11.81. 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 or low P/E ratio is not good or bad in and of itself, but a company trading with a high P/E ratio must continue to post strong financial performance or its stock price is likely to fall. SEE: Profit With The Power Of Price-To-Earnings
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. 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.
by
Investopedia Staff
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