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Biggest Technology Sector Movers for July 12, 2012
This morning's trading has marked a bad day for the market so far. The Nasdaq is trading down 1.3%; the S&P 500 is down 0.8%; and the Dow has slipped 0.5%. The technology sector is a category of stocks relating to the research, development and/or distribution of technologically based goods and services. This sector contains businesses revolving around the manufacturing of electronics, creation of software, computers or products and services relating to information technology. The technology sector offers a wide arrange of products and services for both customers and other businesses. Consumer goods like personal computers, stereos and televisions are continually improved and upgraded, offering the latest technology to all users. Businesses receive information and services from software and database systems, which allow the companies to make strategic business decisions.
The Technology sector (XLK) is currently lagging behind the overall market, down 1.3%, and its current biggest movers are:
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After a precipitous drop of 10.8%, Infosys Ltd (Nasdaq:INFY) is now trading at a share price of $38.92. The company's volume for the day so far is 5.3 million share, 2.7 times 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. Margin ratios highlight companies that are worth further examination. INFY's gross profit margin is 43.9%. Operating margin for INFY is 29.8% and net margin is 24.5%, both low relative to its gross margin.
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 dividend yield is measured by taking the annual dividends per share and dividing that number by the stock price. INFY has a dividend yield of 1.8%, which is fairly low. If you are an income investor, this stock may not be attractive to you. Just as with the yield on a bond or certificate of deposit, the higher the dividend yield, the higher the return to the investor. SEE: Investment Valuation Ratios: Dividend Yield
Lexmark International (NYSE:LXK) is trading at $24.41 per share, down 7.2%. The company's volume for the morning is 759,506 shares. This is in line with its current daily average. Volume indicates the level of interest that investors have in a company at its current price. 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 LXK is 43.7%. All else being equal, investors should feel more confident investing in a company with a high operating margin than one with a low operating margin. Operating profit margin for LXK is 9%. Net profit margin examines how effectively a company is managed and how profitable it is by looking at how much of each dollar in revenues ultimately hits the company's bottom line. Net profit margin for the company is 7.2%.
It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. The price/sales ratio measures a company's stock market value by its total revenues or alternatively, a company's price per share by its revenue per share. LXK has a P/S ratio of 0.57, on the low end. Low P/S ratios are more attractive than high ratios because this indicates that an investor is 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.
Internet Initiative Japan Inc (Nasdaq:IIJI) is currently trading at $11.02 per share, a 6.1% increase. The company's volume is currently 15,344 shares for the day, above yesterday's volume of 4,925 shares. If a stock price makes a big move up or down, volume lets us know the significance of that move. Investment valuation ratios can be very useful in determining the value of a stock, but it is very important to keep in mind that while some financial ratios have general rules (or a broad application), in most instances it is a prudent practice to look at a company's historical performance and use peer company/industry comparisons to put any given company's ratio in perspective. The debt ratio is calculated by dividing total liabilities by total assets. IIJI has a debt ratio of 55.5%. 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.
Increasing 3.8%, Tudou Hldg Ltd (Nasdaq:TUDO) is trading at $28.46 per share. The company is currently trading a volume of 120,701 shares. Volume is used to evaluate how meaningful the price movement of a stock is. 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. TUDO has an operating profit margin of -94.6%. This is because the company reported a net operating loss in the most recent quarter.
Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. 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. TUDO has a debt-equity ratio of 8%, which is on the low side. Companies with low D/E ratios are more attractive to investors because they are better able to protect their business interests in times of decline. The D/E ratio is not a pure measurement of a company's debt because it includes operational liabilities in total liabilities.
At $47.46, Hittite (Nasdaq:HITT) has slipped 3.3%. So far today, the company's volume is 31,009 shares, 0.3 times its average over the past three months. If a stock price moves on high volume, this means that the change is a significant one. Margin analysis is a great way to understand the profitability of companies. HITT has a high gross profit margin of 78.2%. Since gross profit margins tend to stay stable, sudden changes may indicate financial fraud, accounting irregularities or problems in the business. 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. HITT's operating profit margin is 40.2%. 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. Net margin is 30.9%.
When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. The price/book value ratio provides a way of evaluating whether a stock is relatively cheap or expensive. HITT's P/B ratio of 3.06 shows that its share price is higher than its book value. It is important to take the company's debt into account when using the P/B ratio as debt can boost a company's liabilities to the point where they wipe out much of the book value of its hard assets, creating artificially high P/B values. All else being equal, a stock with a low P/B value ratio is more attractive than a stock with a high ratio. SEE: How Buybacks Warps The Price-To-Book Ratio
Slipping 3.2%, F5 Networks (Nasdaq:FFIV) is currently trading at $89.54 per share. The company's volume for the day so far is 913,265 shares. This is 0.5 times its current daily average. High volume indicates a lot of investor interest while low volume indicates the opposite. 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. FFIV has a gross profit margin of 84.5%, which is on the high end. This means that the company will have a lot of money left over to spend on other business operations, such as research and development or marketing. Relative to its gross profit margin, FFIV's operating profit margin of 30.8% and net profit margin of 20.9% are high.
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. 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. FFIV has a P/E ratio of 27.8, high compared to the industry average of 13.47. This could mean that the market is expecting big things over the next few months or years. A high P/E ratio indicates a stock that is expensive, while a low P/E ratio indicates a stock that is cheap. SEE: How To Find P/E And PEG Ratios
Cognizant (Nasdaq:CTSH) has decreased to $54.90 per share, a 2.9% fall. So far today, the company's volume is 2.4 million shares, more than yesterday's 2.1 million shares. The trading volume for a stock indicates the level of investor interest. Margin ratios highlight companies that are worth further examination. The gross profit margin for CTSH is 42.2%. The operating profit margin indicates how much EBIT is generated per dollar of sales. The operating margin for CTSH is 18.6%, which is low compared its gross profit margin. While ratios such as price/earnings (P/E) or price/book value look at the relative attractiveness of a stock, the net profit margin ratio focuses on company performance rather that stock market valuation. The company's net profit margin is 14.2%.
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 assumption with high price/earnings stocks (generally of the growth variety) is that investors are willing to buy at a high price because they believe that the stock has significant growth potential, and the price/earnings to growth (PEG) ratio helps investors determine the degree of reliability of that growth assumption. PEG ratio for CTSH is 1.05. 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.
The Bottom Line No matter the economic climate, Wall Street will always have stocks that make major moves each week. 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.
The Technology sector (XLK) is currently lagging behind the overall market, down 1.3%, and its current biggest movers are:
| Company | Market Cap | Percentage Change |
| Infosys Ltd ADR (Nasdaq:INFY) | $24.92 billion | -10.8% |
| Lexmark International Inc (NYSE:LXK) | $1.87 billion | -7.2% |
| Internet Initiative Japan Inc. (ADR) (Nasdaq:IIJI) | $858.1 million | +6.1% |
| Tudou Hldg Ltd (ADR) (Nasdaq:TUDO) | $777.2 million | +3.8% |
| Hittite Microwave Corp (Nasdaq:HITT) | $1.55 billion | -3.3% |
| F5 Networks, Inc. (Nasdaq:FFIV) | $7.34 billion | -3.2% |
| Cognizant Technology (Nasdaq:CTSH) | $17.21 billion | -2.9% |
After a precipitous drop of 10.8%, Infosys Ltd (Nasdaq:INFY) is now trading at a share price of $38.92. The company's volume for the day so far is 5.3 million share, 2.7 times 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. Margin ratios highlight companies that are worth further examination. INFY's gross profit margin is 43.9%. Operating margin for INFY is 29.8% and net margin is 24.5%, both low relative to its gross margin.
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 dividend yield is measured by taking the annual dividends per share and dividing that number by the stock price. INFY has a dividend yield of 1.8%, which is fairly low. If you are an income investor, this stock may not be attractive to you. Just as with the yield on a bond or certificate of deposit, the higher the dividend yield, the higher the return to the investor. SEE: Investment Valuation Ratios: Dividend Yield
Lexmark International (NYSE:LXK) is trading at $24.41 per share, down 7.2%. The company's volume for the morning is 759,506 shares. This is in line with its current daily average. Volume indicates the level of interest that investors have in a company at its current price. 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 LXK is 43.7%. All else being equal, investors should feel more confident investing in a company with a high operating margin than one with a low operating margin. Operating profit margin for LXK is 9%. Net profit margin examines how effectively a company is managed and how profitable it is by looking at how much of each dollar in revenues ultimately hits the company's bottom line. Net profit margin for the company is 7.2%.
It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. The price/sales ratio measures a company's stock market value by its total revenues or alternatively, a company's price per share by its revenue per share. LXK has a P/S ratio of 0.57, on the low end. Low P/S ratios are more attractive than high ratios because this indicates that an investor is 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.
Internet Initiative Japan Inc (Nasdaq:IIJI) is currently trading at $11.02 per share, a 6.1% increase. The company's volume is currently 15,344 shares for the day, above yesterday's volume of 4,925 shares. If a stock price makes a big move up or down, volume lets us know the significance of that move. Investment valuation ratios can be very useful in determining the value of a stock, but it is very important to keep in mind that while some financial ratios have general rules (or a broad application), in most instances it is a prudent practice to look at a company's historical performance and use peer company/industry comparisons to put any given company's ratio in perspective. The debt ratio is calculated by dividing total liabilities by total assets. IIJI has a debt ratio of 55.5%. 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.
Increasing 3.8%, Tudou Hldg Ltd (Nasdaq:TUDO) is trading at $28.46 per share. The company is currently trading a volume of 120,701 shares. Volume is used to evaluate how meaningful the price movement of a stock is. 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. TUDO has an operating profit margin of -94.6%. This is because the company reported a net operating loss in the most recent quarter.
Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. 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. TUDO has a debt-equity ratio of 8%, which is on the low side. Companies with low D/E ratios are more attractive to investors because they are better able to protect their business interests in times of decline. The D/E ratio is not a pure measurement of a company's debt because it includes operational liabilities in total liabilities.
At $47.46, Hittite (Nasdaq:HITT) has slipped 3.3%. So far today, the company's volume is 31,009 shares, 0.3 times its average over the past three months. If a stock price moves on high volume, this means that the change is a significant one. Margin analysis is a great way to understand the profitability of companies. HITT has a high gross profit margin of 78.2%. Since gross profit margins tend to stay stable, sudden changes may indicate financial fraud, accounting irregularities or problems in the business. 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. HITT's operating profit margin is 40.2%. 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. Net margin is 30.9%.
When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. The price/book value ratio provides a way of evaluating whether a stock is relatively cheap or expensive. HITT's P/B ratio of 3.06 shows that its share price is higher than its book value. It is important to take the company's debt into account when using the P/B ratio as debt can boost a company's liabilities to the point where they wipe out much of the book value of its hard assets, creating artificially high P/B values. All else being equal, a stock with a low P/B value ratio is more attractive than a stock with a high ratio. SEE: How Buybacks Warps The Price-To-Book Ratio
Slipping 3.2%, F5 Networks (Nasdaq:FFIV) is currently trading at $89.54 per share. The company's volume for the day so far is 913,265 shares. This is 0.5 times its current daily average. High volume indicates a lot of investor interest while low volume indicates the opposite. 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. FFIV has a gross profit margin of 84.5%, which is on the high end. This means that the company will have a lot of money left over to spend on other business operations, such as research and development or marketing. Relative to its gross profit margin, FFIV's operating profit margin of 30.8% and net profit margin of 20.9% are high.
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. 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. FFIV has a P/E ratio of 27.8, high compared to the industry average of 13.47. This could mean that the market is expecting big things over the next few months or years. A high P/E ratio indicates a stock that is expensive, while a low P/E ratio indicates a stock that is cheap. SEE: How To Find P/E And PEG Ratios
Cognizant (Nasdaq:CTSH) has decreased to $54.90 per share, a 2.9% fall. So far today, the company's volume is 2.4 million shares, more than yesterday's 2.1 million shares. The trading volume for a stock indicates the level of investor interest. Margin ratios highlight companies that are worth further examination. The gross profit margin for CTSH is 42.2%. The operating profit margin indicates how much EBIT is generated per dollar of sales. The operating margin for CTSH is 18.6%, which is low compared its gross profit margin. While ratios such as price/earnings (P/E) or price/book value look at the relative attractiveness of a stock, the net profit margin ratio focuses on company performance rather that stock market valuation. The company's net profit margin is 14.2%.
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 assumption with high price/earnings stocks (generally of the growth variety) is that investors are willing to buy at a high price because they believe that the stock has significant growth potential, and the price/earnings to growth (PEG) ratio helps investors determine the degree of reliability of that growth assumption. PEG ratio for CTSH is 1.05. 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.
The Bottom Line No matter the economic climate, Wall Street will always have stocks that make major moves each week. 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.
by
Investopedia Staff
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