The market is currently down, with the Nasdaq falling 1.7%, the S&P 500 down 1.3% and the Dow decreasing 1.4%.

The Services sector (IYC) is down 0.6%, outperforming the market overall. Currently, the biggest movers in the sector are:

CompanyMarket CapPercentage Change
Weight Watchers International, Inc. (NYSE:WTW)$2.81 billion-4.4%
PriceSmart, Inc. (Nasdaq:PSMT)$2.01 billion-3.9%
Accenture (NYSE:ACN)$40.97 billion-3.2%
Jones Lang LaSalle Incorporated (NYSE:JLL)$3.1 billion-2.8%
Netflix (Nasdaq:NFLX)$4.54 billion+2.3%
Wynn Resorts (Nasdaq:WYNN)$10.23 billion-2.1% (Nasdaq:PCLN)$33.94 billion-1.9%
Beginner's Guide To NinjaTrader Trading Software

Weight Watchers International (NYSE:WTW) is trading at $48.32 per share, down 4.4%. So far today, the company's volume is 605,440 shares. 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. 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. The gross profit margin for WTW is 57.8%. As with other margin ratios, the operating margin is a percentage, which allows for more standardized comparison across time and among different companies of different sizes. WTW has an operating profit margin of 20.4%. Net profit margin compares net income with sales. The company's net profit margin is 15.7%.

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. When used consistently and uniformly, the price/earnings to growth (PEG) ratio is an essential tool that adds dimension to the price/earnings ratio, allows comparisons across diverse industries and is always on the lookout for value. WTW has a PEG ratio of 0.82, 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.

PriceSmart (Nasdaq:PSMT) is down 3.9% to reach $63.98 per share. The company's volume is currently 165,928 shares for the day, 0.7 times its current daily average. The trading volume for a stock indicates the level of investor interest. Margin analysis is a great way to understand the profitability of companies. PSMT has a low gross profit margin of 17.3%. Investors should track gross profit margin ratios over several years in order to see if earnings are consistent, growing or declining. PSMT's operating margin of 5.5% and net margin of 3.3% are low relative to its gross margin.

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 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. PSMT has a P/B ratio of 5.07 which shows that its share price is higher than its book value. This may be a sign that the company is overvalued. P/B value comparisons should be made among companies in the same industry rather than across industries. SEE: How Buybacks Warps The Price-To-Book Ratio

Accenture (NYSE:ACN) is currently trading at a share price of $58.37, a 3.2% decline. So far today, the company's volume is 1.2 million shares. Yesterday, 3.1 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. 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. The gross profit margin for ACN is 32.1%. Relative to its gross profit margin, ACN's operating profit margin of 13.9% and net profit margin of 8.7% are low.

Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. Dividend yield measures the income that a stock will generate for an investor. Dividend yield for ACN is 2.2%. High dividend yields are generally more important to value investors, investors in larger companies, and income oriented investors than they are to growth investors, investors in small cap stocks, and investors in new or emerging companies. SEE: Dividend Yield For The Downturn

At $68.90, Jones Lang LaSalle (NYSE:JLL) has slipped 2.8%. The company's volume is currently 53,879 shares for the day, 0.1 times the current three-month average. High volume indicates a lot of investor interest while low volume indicates the opposite. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. A price/sales ratio is derived by dividing stock market price by company sales. The P/S ratio for JLL is 0.98, which is relatively low. A company with a lower P/S ratio is generally considered more attractive, since investors are paying less for each dollar of sales. It is important to keep in mind when looking at the P/S ratio that just because a company is generating revenues, this does not mean that the company is profitable, and in the long run, profits drive stock prices.

After rising 2.3%, Netflix (Nasdaq:NFLX) is currently trading at a share price of $83.59. The company is currently trading a volume of 6.1 million shares. In technical analysis, trading volume is used to determine the strength of a market indicator. Profit-margin ratios can give investors deeper insight into management efficiency than earnings alone can provide. Gross profit margin, operating profit margin and net margin are commonly used margins. NFLX's gross profit margin is 66.1%. 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. NFLX's operating profit margin is -0.2%. This is because the company reported a net operating loss in the most recent quarter. Net profit margin is a good tool for fundamental analysis and long-term investing but is less useful for technical analysts and short-term traders. The company has a net profit margin of 4.8%, high compared to its gross profit margin. Companies with high net profit margins have a bigger cushion to protect themselves during the hard times.

Investors can make use of valuation ratios to estimate whether a stock is fairly valued. The easy-to-calculate debt ratio is helpful to investors looking for a quick take on the leverage for a company. NFLX has a debt ratio of 80.9%, which is on the high side. 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.

Wynn (Nasdaq:WYNN) has fallen 2.1% and is currently trading at $99.65 per share. At 1.1 million shares, the company's volume so far today is 0.5 times the average daily volume. 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. 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. The gross profit margin for WYNN is 36.9%. The operating margin ratio can also be useful for tracking an individual company's performance across time, where an increasing ratio is good and a declining ratio may provide cause for concern that a company's business model is weakening. Relative to its gross profit margin, WYNN's operating margin of 19.8% is on the low side. 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 10.9%.

Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. One of the most important estimates of stock market valuation is the price/earnings ratio (P/E ratio). WYNN's P/E ratio of 21.5 is above the industry average of 7.31. This could mean that the market is expecting big things over the next few months or years. High P/E stocks could be "growth" stocks, while low PE stocks may be "value" stocks. SEE: How To Find P/E And PEG Ratios (Nasdaq:PCLN) has decreased to $668.88 per share, a 1.9% fall. So far today, 340,390 shares of the company's stock have changed hands. This is below yesterday's volume of 900,880 shares. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. Margin ratios highlight companies that are worth further examination. PCLN has a gross profit margin of 72.9%. The operating margin ratio is calculated by dividing operating income by sales and provides a measure of what percentage of a company's revenues is available to pay its fixed costs. Operating profit margin for PCLN is 23.3%. A high net profit margin indicates a highly profitable company, and a low profit margin indicates the opposite. Net margin is 24.7%.

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. PCLN has a fairly low capitalization ratio of 26.6%. Low leverage is a significant balance sheet strength, a sign of a less risky investment. A low level of debt and a healthy proportion of equity in a company's capital structure is an indication of financial fitness.

The Bottom Line The nature of the market is such that stocks will have good days and bad days. It is important to weigh current activity against historical performance when making any investment decisions. However, these fundamental metrics must be analyzed with historic data, industry information in addition to firm specific financial statements.

Filed Under: ,
Tickers in this Article: WTW, PSMT, ACN, JLL, NFLX, WYNN, PCLN

comments powered by Disqus

Trading Center