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Tickers in this Article: APAGF, SZYM, APC, ERF, SNP, CWEI, SPH
The Nasdaq has increased 0.3%, the S&P 500 is down 0.2% and the Dow is trading down 0.1% after the morning's trading.

The Oil and Gas Operations sector (DIG) has climbed 1.2% overall, and these are the biggest movers in the sector so far:
CompanyMarket CapPercentage Change
Apco Oil & Gas International Inc. (Nasdaq:APAGF)$575.6 million+15.7%
Solazyme Inc (Nasdaq:SZYM)$856.3 million-10.4%
Anadarko Petroleum (NYSE:APC)$34.5 billion-2.9%
Enerplus Corp (USA) (NYSE:ERF)$2.59 billion+2.4%
China Petroleum & Chemical Corp. (ADR) (NYSE:SNP)$77.3 billion-2.4%
Clayton Williams Energy, Inc. (Nasdaq:CWEI)$639.2 million-2.3%
Suburban Propane Partners, L.P. (NYSE:SPH)$1.54 billion+2.1%
Broker Summary: Fidelity Online Brokerage

Apco Oil & Gas International (Nasdaq:APAGF) has soared 15.7% to reach a current price of $22.62 per share. So far today, 58,522 shares have changed hands. 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. Margin analysis tells us how effectively management can wring profits from sales and how much room a company has to withstand a downturn, fend off competition and make mistakes. APAGF has a gross profit margin of 68%. Operating profit measures how much cash the business throws off, and some consider it a more reliable measure of profitability since it is harder to manipulate with accounting tricks than net earnings. Relative to its gross profit margin, APAGF's operating margin is on the high side. A high operating margin indicates that a company has a greater ability to pay its fixed costs, which means that the company has greater financial flexibility and a greater margin of error should its business decline. Net profit margin compares net income with sales. The company has a net profit margin of 30.1%.

When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. Perhaps one of the most widely-used stock analysis tools is the price-to-earnings ratio, or P/E. APAGF's P/E ratio of 17.1 is under the industry average of 25.62. A low P/E ratio may indicate that the market expects relatively slower earnings growth. From the investor's perspective, a stock with a lower ratio is relatively cheaper than a stock with a higher ratio. SEE: Investment Valuation Ratios: Price/Earnings Ratio

After a precipitous drop of 10.4%, Solazyme (Nasdaq:SZYM) is now trading at a share price of $12.70. The company's volume is currently 403,825 shares for the day, 0.5 times its current three-month average. High volume indicates a lot of investor interest while low volume indicates the opposite. Calculating the profit margin is a great way to gain insight into aspects of how well a company generates and retains money. Instead of measuring how much managers earn from assets, equity or invested capital, profit-margin ratios measure how far a company stretches its total revenue or total sales. Operating margin for SZYM is -126.2%. This means that the company came in with a net operating loss in the most recent quarter.

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 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. SZYM has a fairly low capitalization ratio of 4.3%. A very low capitalization ratio might be a sign that the company is stagnating and reducing the potential earnings for shareholders. A low level of debt and a healthy proportion of equity in a company's capital structure is an indication of financial fitness.

Anadarko (NYSE:APC) is trading at $67.06 per share, down 2.9%. The company's volume is currently 2.3 million shares. Trading activity is down from yesterday when 3.6 million shares changed hands. 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 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. There are many tools investors can use to evaluate a stock, including margins. Margins, quite simply, are earnings expressed as a ratio, or a percentage of sales, and this allows investors to compare the profitability of different companies, while net earnings, which are presented as an absolute number, cannot. The gross profit margin for APC is 50.2%. APC has an operating profit margin of 78.4%, which is low relative to its gross profit margin.

It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. The price/book value ratio is one of the more common methods of determining whether a stock is fairly valued. APC has a P/B ratio of 1.65 which shows that its share price is higher than its book value. This may be a sign that the company is overvalued. 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

Enerplus Corp (NYSE:ERF) has risen 2.4% and is currently trading at $13.44 per share. So far today, the company's volume is 927,892 shares, 0.5 times the average daily volume. Volume is used to evaluate how meaningful the price movement of a stock is. Margin analysis is a great way to understand the profitability of companies. ERF has a gross profit margin of 58.6%. Value investors, investors in distressed securities, and junk bond investors will probably pay more attention to the operating margin ratio. ERF's operating profit margin is -16.6%. In other words, the company reported a net operating loss in the most recent quarter. Net profit margins are those generated from all phases of a business, including taxes. Net margin is 4.7%, which is high relative to its gross profit margin. A company with a high profit margin has a greater capability to maintain strong earnings during a recession than does a company with a low profit margin, providing investors with a greater margin of safety.

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. Dividend yield measures the income that a stock will generate for an investor. ERF has a dividend yield of 8%. A stock's dividend yield depends on the nature of a company's business, its posture in the marketplace (value or growth oriented), its earnings and cash flow, and its dividend policy. SEE: Dividend Yield For The Downturn

China Petroleum & Chemical Corp (NYSE:SNP) is down 2.4% to reach $87.06 per share. The company is currently trading a volume of 79,907 shares. If a stock price moves on high volume, this means that the change is a significant one. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. The price/earnings to growth (PEG) ratio is calculated by dividing the price/earnings ratio by growth in earnings-per-share; the lower the PEG ratio, the more reasonably valued the security. SNP has a PEG ratio of 2.12, 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.

Slipping 2.3%, Clayton Williams Energy (Nasdaq:CWEI) is currently trading at $51.33 per share. At 17,496 shares, the company's volume so far today is 0.1 times its average over the past three months. In technical analysis, trading volume is used to determine the strength of a market indicator. Profit-margin ratios help us to keep score, as measured over time, of management's ability to generate profits and manage costs and expenses. There are three key profit-margin ratios: gross profit margin, operating profit margin and net profit margin. CWEI's gross profit margin is 67.1%. Operating margin is determined by taking operating income (income minus variable expenses) and dividing it by sales. Operating profit margin for CWEI is 24.6%. Net profit margin comes as close as possible to summing-up in a single figure how effectively managers run the business. Net profit margin for the company is 25.8%.

Valuation ratios allow the investor to make a quick determination as to a company's investment value. In a nutshell, the price/sales ratio shows how much Wall Street values every dollar of the company's sales. The P/S ratio for CWEI is 2.28, 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.

After an increase of 2.1%, Suburban Propane Partners (NYSE:SPH) has reached a current price of $44.17. The company is trading at a volume of 46,431 shares. This is below yesterday's volume of 104,224 shares. The trading volume for a stock indicates the level of investor interest. Profit-margin ratios measure how much money a company squeezes from its total revenue or total sales. Investors can look at a company's gross profit margin, operating profit margin and net margin to understand a company's profitability. SPH has a low gross profit margin of 15.1%. Investors should track gross profit margin ratios over several years in order to see if earnings are consistent, growing or declining. SPH's operating margin of 15.7% and net margin of 4.2% are low relative to its gross margin.

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. One of the most important estimates of stock market valuation is the price/earnings ratio (P/E ratio). Compared to the industry average of 7.93, SPH's P/E ratio of 35.2 is quite high. Usually, if a stock has a high P/E ratio, it indicates that the market expects the company to grow earnings quickly in the future. 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 On any given day, a particular stock may see positive or negative change in its share price. 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.

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