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Tickers in this Article: DLR, KRC, Z, FSRV, TCO, VNO, PSA
The Nasdaq has risen 1.1%, the S&P 500 is up 0.3% and the Dow has climbed 0.3% on a good day for the market so far.

The Real Estate Operations sector (IYR) is down 1.3% on a good day for the market overall. The biggest movers in the sector so far are:
CompanyMarket CapPercentage Change
Digital Realty Trust, Inc. (NYSE:DLR)$9.29 billion-4.4%
Kilroy Realty Corp (NYSE:KRC)$3.34 billion-2.6%
Zillow Inc (Nasdaq:Z)$1.24 billion-2.3%
FirstService Corporation (USA) (Nasdaq:FSRV)$784.5 million+2.1%
Taubman Centers, Inc. (NYSE:TCO)$4.52 billion-1.9%
Vornado Realty (NYSE:VNO)$15.89 billion-1.9%
Public Storage (NYSE:PSA)$25.36 billion-1.9%
Software Summary: Finviz.com Stock Screener

Currently trading at $72.98 per share, Digital Realty Trust (NYSE:DLR) has fallen 4.4%. The company's volume is currently 1.7 million shares. This is below yesterday's volume of 4.7 million shares. Volume is used to evaluate how meaningful the price movement of a stock is. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. 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. DLR's capitalization ratio of 56.1% is relatively high. If the company is a company is in a highly competitive business and hobbled by high debt, it will find its competitors taking advantage of its problems to grab more market share. This ratio is considered to be one of the more meaningful of the "debt" ratios - it delivers the key insight into the use of leverage by a company.

At $47.63, Kilroy (NYSE:KRC) has slipped 2.6%. So far today, the company's volume is 244,593 shares, 0.5 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. Looking at a company's valuation ratios is a good way of getting a basic idea as to its value as an investment. There are generally two price/earnings ratios calculated: the first, called the trailing Price/Earnings ratio, is calculated using the previous years actual earnings; the second, called forward Price/Earnings ratio, is calculated using the next year's estimated earnings. KRC's P/E ratio of 62.2 is above the industry average of 14.14. Generally speaking, the higher the P/E ratio, the higher the market expectations for a company's future performance. High P/E stocks could be "growth" stocks, while low PE stocks may be "value" stocks. SEE: Understanding The P/E Ratio

Zillow (Nasdaq:Z) is trading at $42.10 per share, down 2.3%. The company is currently trading a volume of 336,458 shares. The trading volume for a stock indicates the level of investor interest. 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. Z has a high gross profit margin of 94.9%. A high gross profit margin generally means that the company can make a reasonable profit on sales, provided that overhead costs do not increase. Z's operating margin of 7.4% and net margin of 4.7% are high relative to its gross margin.

Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. The debt ratio shows the proportion of assets that a company is financing through debt. Z's debt ratio of 12.7% is on the low side. 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. 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.

FirstService Corporation (Nasdaq:FSRV) is up 2.1% to reach a current price of $27.91 per share. At 7,700 shares, the company's volume so far today is 0.4 times its average over the past three months. High volume indicates a lot of investor interest while low volume indicates the opposite. 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. FSRV's gross profit margin is 34.4%. Investors trying to assess a company's ability to continue to pay its fixed expenses even if its business declines may want to evaluate the operating margin ratio. FSRV has a negative operating margin of -1.9%. This is because the company reported a net operating loss in the most recent quarter. Net profit margin compares net income with sales. The company's net profit margin is 4.3%.

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/sales ratio is used for spotting recovery situations or for double-checking that a company's growth has not become overvalued. FSRV has a P/S ratio of 0.41, on the low end. Highly levered companies are likely to have lower P/S ratios because the price aspect of this ratio only measures stock market valuation while sales is a function of both stock market and bond market capitalization. All things being equal, a low P/S ratio is good news for investors, while a very high one can be a warning sign.

Slipping 1.9%, Taubman Centers (NYSE:TCO) is currently trading at $75.44 per share. The company is trading at a volume of 159,727 shares. Yesterday, 506,383 shares changed hands. If a stock price moves on high volume, this means that the change is a significant one. 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. 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. The capitalization ratio for TCO is 108.5%, which is fairly high. A company considered too highly leveraged (too much debt) may find its freedom of action restricted by its creditors and/or have its profitability hurt by high interest costs. Prudent use of leverage (debt) increases the financial resources available to a company for growth and expansion.

So far today, the company's volume is 215,767 shares, 0.2 times the current daily average. In technical analysis, trading volume is used to determine the strength of a market indicator. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. A simple P/E ratio can reveal the stock's real market value and show how the valuation compares to its industry group or a benchmark like the S&P 500 Index. VNO has a P/E ratio of 37.1, high compared to the industry average of 14.14. A company with a high P/E ratio will eventually have to live up to the high rating by substantially increasing its earnings, or the price will need to drop. 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: How To Find P/E And PEG Ratios

Falling 1.9%, Public Storage (NYSE:PSA) is currently at a share price of $145.02. This morning, the company is trading a volume of 216,772 shares. Volume is an important indicator because it indicates how significant a price shift is. 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/earnings to growth (PEG) ratio divides a company's P/E ratio by its growth rate of earnings-per-share. PSA's PEG ratio is 3.67. Because of the adjustment for earnings growth rate, the PEG ratio is somewhat more useful than many formulas for comparing companies in different industries.

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.

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