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Biggest Technology Sector Movers for July 18, 2012
On a good day for the market, the Nasdaq has increased 1.2%, the S&P 500 has climbed 0.6% and the Dow is trading up 0.7%. 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 up 1.4%, outperforming the market overall. The biggest movers in the sector so far are:
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Amphenol (NYSE:APH) is currently at $58.77 per share after a dramatic increase of 14.4%. The company is trading at a volume of 2.3 million shares. Yesterday, volume was only 1.8 million shares. When a stock price moves up or down, watching the volume is a good way of identifying how significant that shift is. 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 APH is 34.4%. Relative to its gross profit margin, APH's operating profit margin of 18.9% and net profit margin of 13.1% are low.
Investment valuation ratios can be very useful in estimating whether a stock price is too high, reasonable or a bargain investment opportunity. The debt-equity (D/E) ratio is a leverage ratio. APH's D/E ratio is 62%. The D/E ratio is not a pure measurement of a company's debt because it includes operational liabilities in total liabilities.
After a big jump of 10.1%, VMware (NYSE:VMW) is trading at $88.43 per share. The company's volume is currently 3.8 million shares for the day, 1.6 times the current daily average. Volume is an important indicator because it indicates how significant a price shift is. 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. VMW has a gross profit margin of 91.9%, which is on the high end. Since gross profit margins tend to stay stable, sudden changes may indicate financial fraud, accounting irregularities or problems in the business. Relative to its gross profit margin, VMW's operating profit margin of 20.6% and net profit margin of 19.8% are high.
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. 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. The capitalizion ratio of 8% is on the low end. A very low capitalization ratio might be a sign that the company is stagnating and reducing the potential earnings for shareholders. Prudent use of leverage (debt) increases the financial resources available to a company for growth and expansion.
Increasing 9.6%, Stratasys (Nasdaq:SSYS) is trading at $56.95 per share. The company's volume for the day so far is 374,101 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. The gross profit margin for SSYS is 58.8%. A company's operating margin is calculated by dividing operating income by revenues. SSYS' operating profit margin is 16.1%. Net profit margin comes as close as possible to summing-up in a single figure how effectively managers run the business. The company has a net profit margin of 12.1%.
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. Perhaps one of the most widely-used stock analysis tools is the price-to-earnings ratio, or P/E. SSYS has a P/E ratio of 55.2, high compared to the industry average of 29.41. 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 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
After rising 8.8%, Check Point Software (Nasdaq:CHKP) is currently trading at a share price of $49.63. At 4.5 million shares, the company's volume so far today is 1.4 times the current three-month average. A stock's volume conveys how excited investors are about it. 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. CHKP has a high gross profit margin of 92.1%. Investors should track gross profit margin ratios over several years in order to see if earnings are consistent, growing or declining. Operating profit gives investors an opportunity to do profit-margin comparisons between companies that do not issue a separate disclosure of their cost of goods sold figures (which are needed to do gross margin analysis). Operating profit margin for CHKP is 55.2%. Tracking net profit margin over time for a single company can be a valuable tool for seeing how a business is developing. Net margin is 44.2%.
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. 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. PEG ratio for CHKP is 1.38. Because of the adjustment for earnings growth rate, the PEG ratio is somewhat more useful than many formulas for comparing companies in different industries.
Quality Systems (Nasdaq:QSII) has decreased to $23.85 per share, a 8.3% fall. So far today, the company's volume is 1.1 million shares. Yesterday's volume was only 306,963 shares. 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. 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. QSII has a gross profit margin of 68.5%. 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 margin of 17.6% is high relative to its gross profit margin. Investors in companies with high profit margins can be confident that even if sales dip slightly, profits will remain strong. Operating margin is determined by taking operating income (income minus variable expenses) and dividing it by sales. QSII's operating profit margin is 21.4%.
When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. The debt ratio measures the leverage of a company, and a company's leverage is a good way to assess risk. The debt ratio for QSII is a low 33%. This indicates that the company engages in conservative financing with opportunities to borrow in the future at no significant risk. 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.
Rising 6.6%, Honeywell (NYSE:HON) is currently trading at $58.15 per share. The company's volume is currently 4.2 million shares for the day, 1.3 times the average daily volume. 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 is a great way to understand the profitability of companies. HON has a low gross profit margin of 24.5%. This may mean that the company is struggling to control production costs, or that a low amount of earnings is being generated from revenues. HON's operating margin of 12.9% and net margin of 5.9% are low relative to its gross margin.
Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. 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. Dividend yield for HON is 2.7%. 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: Investment Valuation Ratios: Dividend Yield
F5 Networks (Nasdaq:FFIV) has increased to a share price of $97.63, a 6.4% rise. The company is currently trading a volume of 1.8 million shares. If a stock price moves on high volume, this means that the change is a significant one. 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. FFIV's gross profit margin of 84.5% is on the high side. This may indicate that the company is over-pricing its products and/or services. Operating margin for FFIV is 30.8% and net margin is 20.9%, both high relative to its gross margin.
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 price/sales ratio is used for spotting recovery situations or for double-checking that a company's growth has not become overvalued. The P/S ratio for FFIV is a high 8.44. This could be a good sign if the share price increases. 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.
The Bottom Line No matter the economic climate, Wall Street will always have stocks that make major moves each week. Paying close attention to the previous ratios will help you identify key times to adjust your strategy. 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 up 1.4%, outperforming the market overall. The biggest movers in the sector so far are:
| Company | Market Cap | Percentage Change |
| Amphenol (NYSE:APH) | $8.32 billion | +14.4% |
| VMware (NYSE:VMW) | $34.3 billion | +10.1% |
| Stratasys, Inc. (Nasdaq:SSYS) | $1.11 billion | +9.6% |
| Check Point Software Technologies Ltd. (Nasdaq:CHKP) | $9.46 billion | +8.8% |
| Quality Systems, Inc. (Nasdaq:QSII) | $1.54 billion | -8.3% |
| Honeywell International (NYSE:HON) | $42.5 billion | +6.6% |
| F5 Networks, Inc. (Nasdaq:FFIV) | $7.29 billion | +6.4% |
Amphenol (NYSE:APH) is currently at $58.77 per share after a dramatic increase of 14.4%. The company is trading at a volume of 2.3 million shares. Yesterday, volume was only 1.8 million shares. When a stock price moves up or down, watching the volume is a good way of identifying how significant that shift is. 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 APH is 34.4%. Relative to its gross profit margin, APH's operating profit margin of 18.9% and net profit margin of 13.1% are low.
Investment valuation ratios can be very useful in estimating whether a stock price is too high, reasonable or a bargain investment opportunity. The debt-equity (D/E) ratio is a leverage ratio. APH's D/E ratio is 62%. The D/E ratio is not a pure measurement of a company's debt because it includes operational liabilities in total liabilities.
After a big jump of 10.1%, VMware (NYSE:VMW) is trading at $88.43 per share. The company's volume is currently 3.8 million shares for the day, 1.6 times the current daily average. Volume is an important indicator because it indicates how significant a price shift is. 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. VMW has a gross profit margin of 91.9%, which is on the high end. Since gross profit margins tend to stay stable, sudden changes may indicate financial fraud, accounting irregularities or problems in the business. Relative to its gross profit margin, VMW's operating profit margin of 20.6% and net profit margin of 19.8% are high.
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. 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. The capitalizion ratio of 8% is on the low end. A very low capitalization ratio might be a sign that the company is stagnating and reducing the potential earnings for shareholders. Prudent use of leverage (debt) increases the financial resources available to a company for growth and expansion.
Increasing 9.6%, Stratasys (Nasdaq:SSYS) is trading at $56.95 per share. The company's volume for the day so far is 374,101 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. The gross profit margin for SSYS is 58.8%. A company's operating margin is calculated by dividing operating income by revenues. SSYS' operating profit margin is 16.1%. Net profit margin comes as close as possible to summing-up in a single figure how effectively managers run the business. The company has a net profit margin of 12.1%.
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. Perhaps one of the most widely-used stock analysis tools is the price-to-earnings ratio, or P/E. SSYS has a P/E ratio of 55.2, high compared to the industry average of 29.41. 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 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
After rising 8.8%, Check Point Software (Nasdaq:CHKP) is currently trading at a share price of $49.63. At 4.5 million shares, the company's volume so far today is 1.4 times the current three-month average. A stock's volume conveys how excited investors are about it. 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. CHKP has a high gross profit margin of 92.1%. Investors should track gross profit margin ratios over several years in order to see if earnings are consistent, growing or declining. Operating profit gives investors an opportunity to do profit-margin comparisons between companies that do not issue a separate disclosure of their cost of goods sold figures (which are needed to do gross margin analysis). Operating profit margin for CHKP is 55.2%. Tracking net profit margin over time for a single company can be a valuable tool for seeing how a business is developing. Net margin is 44.2%.
Quality Systems (Nasdaq:QSII) has decreased to $23.85 per share, a 8.3% fall. So far today, the company's volume is 1.1 million shares. Yesterday's volume was only 306,963 shares. 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. 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. QSII has a gross profit margin of 68.5%. 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 margin of 17.6% is high relative to its gross profit margin. Investors in companies with high profit margins can be confident that even if sales dip slightly, profits will remain strong. Operating margin is determined by taking operating income (income minus variable expenses) and dividing it by sales. QSII's operating profit margin is 21.4%.
When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. The debt ratio measures the leverage of a company, and a company's leverage is a good way to assess risk. The debt ratio for QSII is a low 33%. This indicates that the company engages in conservative financing with opportunities to borrow in the future at no significant risk. 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.
Rising 6.6%, Honeywell (NYSE:HON) is currently trading at $58.15 per share. The company's volume is currently 4.2 million shares for the day, 1.3 times the average daily volume. 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 is a great way to understand the profitability of companies. HON has a low gross profit margin of 24.5%. This may mean that the company is struggling to control production costs, or that a low amount of earnings is being generated from revenues. HON's operating margin of 12.9% and net margin of 5.9% are low relative to its gross margin.
Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. 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. Dividend yield for HON is 2.7%. 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: Investment Valuation Ratios: Dividend Yield
F5 Networks (Nasdaq:FFIV) has increased to a share price of $97.63, a 6.4% rise. The company is currently trading a volume of 1.8 million shares. If a stock price moves on high volume, this means that the change is a significant one. 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. FFIV's gross profit margin of 84.5% is on the high side. This may indicate that the company is over-pricing its products and/or services. Operating margin for FFIV is 30.8% and net margin is 20.9%, both high relative to its gross margin.
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 price/sales ratio is used for spotting recovery situations or for double-checking that a company's growth has not become overvalued. The P/S ratio for FFIV is a high 8.44. This could be a good sign if the share price increases. 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.
The Bottom Line No matter the economic climate, Wall Street will always have stocks that make major moves each week. Paying close attention to the previous ratios will help you identify key times to adjust your strategy. 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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