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Biggest Healthcare Sector Movers for July 23, 2012, Including ARNA
It's been a bad day for the market after the morning's trading. The Nasdaq is down 1.9%; the S&P 500 has fallen 1.3%; and the Dow has decreased 1.1%. The healthcare sector is the category of stocks relating to medical and healthcare goods or services. This sector includes hospital management firms, health maintenance organizations (HMOs), biotechnology and a variety of medical products. Stocks in the healthcare sector are often considered to be defensive because the products and services are essential. Even during economic downturns, people will still require medical aid and medicine to overcome illness. Having a consistent demand for goods and services makes this sector less sensitive to business cycle fluctuations.
The Healthcare sector (XLV) is currently ahead of the overall market, down only 1.5%, and its biggest movers are currently:
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Increasing 8.1%, Arena Pharmaceuticals (Nasdaq:ARNA) is trading at $10.29 per share. The company is currently trading a volume of 10.8 million shares. A stock's volume conveys how excited investors are about it. 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. While measuring a price/earnings ratio (P/E ratio) is a popular valuation technique, the measure cannot be calculated for companies without earnings, so some investors analyze the price/sales ratio. ARNA's P/S ratio of 51.25 is on the high side. In young companies, a high P/S ratio is a sign of sales growth that is expected to turn into earnings and cash flow. All things being equal, a low P/S ratio is good news for investors, while a very high one can be a warning sign.
Intuitive Surgical (Nasdaq:ISRG) is down 4.7% to reach $475.18 per share. With 377,560 shares changing hands so far today, the company's volume is 0.9 times the current three-month average. If a stock price makes a big move up or down, volume lets us know the significance of that move. A wide array of ratios can be used by investors to estimate the attractiveness of a potential or existing investment and get an idea of its valuation. The debt ratio measures the leverage of a company, and a company's leverage is a good way to assess risk. ISRG has a debt ratio of 12.2%, which is fairly low. In other words, the company is less sensitive to changes in business or interest rates since less of its cash flow is dedicated to paying off loan expenses. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.
MAKO (Nasdaq:MAKO) has moved up 3.3% and is currently trading at $13.20 per share. The company's volume is currently 745,483 shares. This is on pace to fall short of yesterday's volume of 2.2 million shares. When a stock price moves up or down, watching the volume is a good way of identifying how significant that shift is. 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 especially important for value investors as it can provide an indication of the true value of a company's assets at a time when its business model may be failing. The P/B ratio for MAKO is 6.0, indicating that the stock is trading for more 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. 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: Using The Price-To-Book Ratio To Evaluate Companies
Fresenius Medical Care AG & Co (NYSE:FMS) has fallen 3.1% and is currently trading at $69.31 per share. The company's volume is currently 20,173 shares for the day, in line with the current daily average. Volume is an important indicator because it indicates how significant a price shift is. 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. 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. FMS has a dividend yield of 0.9%, which is fairly low. 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: Investment Valuation Ratios: Dividend Yield
At $87.33, IDEXX Laboratories (Nasdaq:IDXX) has slipped 2.8%. So far today, the company's volume is 142,165 shares. In technical analysis, trading volume is used to determine the strength of a market indicator. 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. IDXX has a high P/S ratio of 3.86. This could be a good sign if the share price increases. 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.
Slipping 2.7%, Alexion Pharmaceuticals (Nasdaq:ALXN) is currently trading at $96.70 per share. The company's volume for the day so far is 651,250 shares, in keeping with its current three-month 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. Investment valuation ratios can be very useful in estimating whether a stock price is too high, reasonable or a bargain investment opportunity. 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. ALXN's debt ratio of 39.9% is on the low side. A low debt ratio means the company has more available cash flow. 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.
Shire Plc (Nasdaq:SHPG) is currently trading at a share price of $86.91, a 2.7% decline. The company's volume for the day so far is 226,687 shares. If a stock price moves on high volume, this means that the change is a significant one. 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. Perhaps one of the most widely-used stock analysis tools is the price-to-earnings ratio, or P/E. SHPG's P/E ratio is 19.2. 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: Profit With The Power Of Price-To-Earnings
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. 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 Healthcare sector (XLV) is currently ahead of the overall market, down only 1.5%, and its biggest movers are currently:
| Company | Market Cap | Percentage Change |
| Arena Pharmaceuticals, Inc. (Nasdaq:ARNA) | $1.88 billion | +8.1% |
| Intuitive Surgical (Nasdaq:ISRG) | $19.79 billion | -4.7% |
| MAKO Surgical Corp. (Nasdaq:MAKO) | $544.9 million | +3.3% |
| Fresenius Medical Care AG & Co. (ADR) (NYSE:FMS) | $21.44 billion | -3.1% |
| IDEXX Laboratories, Inc. (Nasdaq:IDXX) | $4.94 billion | -2.8% |
| Alexion Pharmaceuticals, Inc. (Nasdaq:ALXN) | $18.59 billion | -2.7% |
| Shire Plc. (ADR) (Nasdaq:SHPG) | $16.74 billion | -2.7% |
Increasing 8.1%, Arena Pharmaceuticals (Nasdaq:ARNA) is trading at $10.29 per share. The company is currently trading a volume of 10.8 million shares. A stock's volume conveys how excited investors are about it. 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. While measuring a price/earnings ratio (P/E ratio) is a popular valuation technique, the measure cannot be calculated for companies without earnings, so some investors analyze the price/sales ratio. ARNA's P/S ratio of 51.25 is on the high side. In young companies, a high P/S ratio is a sign of sales growth that is expected to turn into earnings and cash flow. All things being equal, a low P/S ratio is good news for investors, while a very high one can be a warning sign.
Intuitive Surgical (Nasdaq:ISRG) is down 4.7% to reach $475.18 per share. With 377,560 shares changing hands so far today, the company's volume is 0.9 times the current three-month average. If a stock price makes a big move up or down, volume lets us know the significance of that move. A wide array of ratios can be used by investors to estimate the attractiveness of a potential or existing investment and get an idea of its valuation. The debt ratio measures the leverage of a company, and a company's leverage is a good way to assess risk. ISRG has a debt ratio of 12.2%, which is fairly low. In other words, the company is less sensitive to changes in business or interest rates since less of its cash flow is dedicated to paying off loan expenses. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.
MAKO (Nasdaq:MAKO) has moved up 3.3% and is currently trading at $13.20 per share. The company's volume is currently 745,483 shares. This is on pace to fall short of yesterday's volume of 2.2 million shares. When a stock price moves up or down, watching the volume is a good way of identifying how significant that shift is. 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 especially important for value investors as it can provide an indication of the true value of a company's assets at a time when its business model may be failing. The P/B ratio for MAKO is 6.0, indicating that the stock is trading for more 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. 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: Using The Price-To-Book Ratio To Evaluate Companies
Fresenius Medical Care AG & Co (NYSE:FMS) has fallen 3.1% and is currently trading at $69.31 per share. The company's volume is currently 20,173 shares for the day, in line with the current daily average. Volume is an important indicator because it indicates how significant a price shift is. 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. 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. FMS has a dividend yield of 0.9%, which is fairly low. 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: Investment Valuation Ratios: Dividend Yield
At $87.33, IDEXX Laboratories (Nasdaq:IDXX) has slipped 2.8%. So far today, the company's volume is 142,165 shares. In technical analysis, trading volume is used to determine the strength of a market indicator. 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. IDXX has a high P/S ratio of 3.86. This could be a good sign if the share price increases. 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.
Slipping 2.7%, Alexion Pharmaceuticals (Nasdaq:ALXN) is currently trading at $96.70 per share. The company's volume for the day so far is 651,250 shares, in keeping with its current three-month 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. Investment valuation ratios can be very useful in estimating whether a stock price is too high, reasonable or a bargain investment opportunity. 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. ALXN's debt ratio of 39.9% is on the low side. A low debt ratio means the company has more available cash flow. 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.
Shire Plc (Nasdaq:SHPG) is currently trading at a share price of $86.91, a 2.7% decline. The company's volume for the day so far is 226,687 shares. If a stock price moves on high volume, this means that the change is a significant one. 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. Perhaps one of the most widely-used stock analysis tools is the price-to-earnings ratio, or P/E. SHPG's P/E ratio is 19.2. 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: Profit With The Power Of Price-To-Earnings
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. 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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