The Nasdaq is up 0.4%, the S&P 500 has moved little and the Dow remains relatively unchanged so far today. 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) has increased 0.8% overall, and these are the biggest movers in the sector so far:
|Company||Market Cap||Percentage Change|
|Cirrus Logic, Inc. (Nasdaq:CRUS)||$1.92 billion||+23.4%|
|Medidata Solutions Inc (Nasdaq:MDSO)||$786.3 million||+15.5%|
|Advent Software, Inc. (Nasdaq:ADVS)||$1.37 billion||-11.8%|
|CommVault Systems, Inc. (Nasdaq:CVLT)||$2.04 billion||+11.1%|
|BroadSoft Inc (Nasdaq:BSFT)||$645 million||+9.8%|
|LogMeIn Inc (Nasdaq:LOGM)||$600.7 million||-8.6%|
|Monolithic Power Systems, Inc. (Nasdaq:MPWR)||$618.6 million||+7.8%|
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Cirrus Logic (Nasdaq:CRUS) rose a significant 23.4% to reach $36.81 per share. With 7.6 million shares changing hands so far today, the company's volume is 2.7 times its average over the past three months. 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. While measuring a price/earnings ratio (P/E ratio) is a popular valuation technique, the measure cannot be calculated for companies without earnings, so some investors analyze the price/sales ratio. The P/S ratio for CRUS is 3.57, which is relatively high. In young companies, a high P/S ratio is a sign of sales growth that is expected to turn into earnings and cash flow. It is important to compare P/S ratios for companies in the same industry, as ratios can vary quite widely for companies in different industries.
Medidata Solutions (Nasdaq:MDSO) is trading at $36.00 per share, a significant rise of 15.5%. The company's volume for the day so far is 462,466 shares. 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 a 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. 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 gives users a quick measure of the amount of debt that the company has on its balance sheets compared to its assets. The debt ratio for MDSO is a low 43.3%. 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.
After a precipitous drop of 11.8%, Advent Software (Nasdaq:ADVS) is now trading at a share price of $23.91. So far today, 544,415 shares have changed hands, which is more trading activity than there was yesterday. High volume indicates a lot of investor interest while low volume indicates the opposite. 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 leverage ratio. ADVS has a low debt-equity ratio of 17%. 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.
CommVault Systems (Nasdaq:CVLT) has soared 11.1% to reach a current price of $50.42 per share. This morning, the company's volume is 1.1 million shares. This is 1.6 times the average daily volume. If a stock price makes a big move up or down, volume lets us know the significance of that move. 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 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. CVLT has a P/E ratio of 69.2, in line with the industry average. To determine the P/E ratio, an investor divides the market price of the stock by the earnings-per-share (EPS) of the stock. SEE: How To Find P/E And PEG Ratios
BroadSoft (Nasdaq:BSFT) is up 9.8% to reach a current price of $25.78 per share. So far today, the company's volume is 532,011 shares, 0.8 times the average volume over the last three months. A stock's volume conveys how excited investors are about it. Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. The price/earnings to growth (PEG) ratio compares a company's P/E ratio to its earnings-per-share growth rate, which tells you whether or not you are getting a good value when purchasing a stock with a high price/earnings ratio (P/E ratio). BSFT has a PEG ratio of 1.35, which is consistent with the industry average. Because of the adjustment for earnings growth rate, the PEG ratio is somewhat more useful than many formulas for comparing companies in different industries.
Falling 8.6%, LogMeIn (Nasdaq:LOGM) is currently at a share price of $22.30. So far today, 807,574 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. 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/book value ratio is one of the more common methods of determining whether a stock is fairly valued. LOGM's P/B ratio of 3.4 shows that its share price is higher than its book value. This may be a sign that the company is overvalued. Users need to be careful when applying this ratio though, as it is more useful for industrial companies that have a lot of tangible assets than it is for technology or consumer product companies that may not have much in the way of hard assets. SEE: How Buybacks Warps The Price-To-Book Ratio
Monolithic Power Systems (Nasdaq:MPWR) is at $19.29 per share after an increase of 7.8%. The company's volume is currently 1.2 million shares for the day, above yesterday's volume of 550,162 shares. The trading volume for a stock indicates the level of investor interest. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. 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 MPWR is a high 3.34. This could be a good sign if the share price increases. All things being equal, a low P/S ratio is good news for investors, while a very high one can be a warning sign.
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.