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Big Movers on the Consumer/Non-Cyclical Sector Today
The Nasdaq has climbed 1.1%, the S&P 500 is up 0.3% and the Dow has risen 0.3%, marking a bad morning for the market.
The Consumer/Non-Cyclical sector (XLP) is down 0.1% on a good day for the market overall. The biggest movers in the sector so far are:
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Peet's Coffee & Tea (Nasdaq:PEET) is at $57.88 per share after an increase of 6%. So far today, 187,652 shares have changed hands. If a stock price makes a big move up or down, volume lets us know the significance of that 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. PEET has a low gross profit margin of 19.1%. Since gross profit margins tend to stay stable, sudden changes may indicate financial fraud, accounting irregularities or problems in the business. Operating margin for PEET is 5.6% and net margin is 4.1%, both low relative to its gross margin.
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 price/book value ratio is calculated by dividing the current stock price by the company's book value per share. PEET's P/B ratio of 4.12 shows that its share price is higher than its book value. This may be a sign that the company is overvalued. 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
Rising 3.4%, Estee Lauder (NYSE:EL) is currently trading at $54.40 per share. At 1.3 million shares, the company's volume so far today is 0.4 times its current three-month average. When a stock price moves up or down, watching the volume is a good way of identifying how significant that shift is. 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. EL has a relatively high gross profit margin of 79.2%. This may indicate that the company is over-pricing its products and/or services. EL has an operating profit margin of 9.4% and a net profit margin of 8.9%, both high compared to its gross profit 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 debt-equity (D/E) ratio is a leverage ratio. EL has a low debt-equity ratio of 42%. A low D/E ratio may be a sign that the company is not taking advantage of leverage to increase its profits. The D/E ratio is not a pure measurement of a company's debt because it includes operational liabilities in total liabilities.
Falling 3.2%, Post Holdings (NYSE:POST) is currently at a share price of $30.01. The company is trading at a volume of 30,911 shares. Yesterday, 144,776 shares changed hands. 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. 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 POST is 44.1%. Net profit margins are those generated from all phases of a business, including taxes. The company has a net profit margin of -55.6%. A negative net profit margin means the company spent more money than it made. Operating margin can be an important ratio for some investors, particularly those investing in weaker companies or companies in cyclical industries. POST's operating profit margin is 13.3%.
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. The price/earnings ratio is calculated by taking a stock price and dividing it by the earnings-per-share (EPS). The P/E ratio for POST is 45.3, above the industry average of 37.08. This could mean that the market is expecting big things over the next few months or years. From the investor's perspective, a stock with a lower ratio is relatively cheaper than a stock with a higher ratio. SEE: The P/E Ratio: A Good Market-Timing Indicator
After a decline of 2.7%, J&J Snack (Nasdaq:JJSF) has hit a share price of $54.65. At 14,189 shares, the company's volume so far today is 0.5 times the current daily average. The trading volume for a stock indicates the level of investor interest. 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. JJSF has a gross profit margin of 33.7%. A company's operating margin is calculated by dividing operating income by revenues. JJSF has an operating profit margin of 8.6%. Ideally, a company's profit margin should be stable or rising; declining profit margin should be cause for concern or further investigation. Net profit margin for the company is 7%.
Looking at a company's valuation ratios is a good way of getting a basic idea as to its value as an investment. 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 JJSF is a low 21%. A low debt ratio means the company has more available cash flow. 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.
Snyder S Lance (Nasdaq:LNCE) is currently trading at a share price of $23, a 2.3% decline. This morning, the company is trading a volume of 84,788 shares. Volume indicates the level of interest that investors have in a company at its current price. Margin ratios highlight companies that are worth further examination. The gross profit margin for LNCE is 37.2%. Operating margin is determined by taking operating income (income minus variable expenses) and dividing it by sales. LNCE's operating profit margin is 6.6%. Net profit margin is calculated by dividing net income by sales. Net margin is 2.5%.
Investment valuation ratios can be very useful in estimating whether a stock price is too high, reasonable or a bargain investment opportunity. The dividend yield is calculated by dividing a company's dividends per share by its stock price. LNCE has a dividend yield of 2.7%. 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: Guide To Stock-Picking Strategies: Income Investing
Currently trading at $53.30 per share, United Natural Foods (Nasdaq:UNFI) has fallen 2.1%. With 120,349 shares changing hands so far today, the company's volume is 0.6 times its average over the past three months. In technical analysis, trading volume is used to determine the strength of a market indicator. 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. UNFI has a low gross profit margin of 18.6%. This may mean that the company is struggling to control production costs, or that a low amount of earnings is being generated from revenues. UNFI's operating margin of 3.5% and net margin of 1.7% are low relative to its gross margin.
Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. The price/sales ratio measures a company's stock market price by its revenues. UNFI has a low P/S ratio of 0.48. Low P/S ratios can indicate unrecognized value potential - so long as other criteria like high profit margins, low debt levels and growth prospects are in place. A limitation of the P/S ratio is that the price component measures only stock market captialization, while sales are a function of the entire capital structure, potentially leading to wide differences between levered and unlevered companies.
Monster (Nasdaq:MNST) has decreased to $70.39 per share, a 2.1% fall. The company's volume for the day so far is 691,456 shares. This is less trading activity than there was yesterday. A stock's volume conveys how excited investors are about it. 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 MNST is 53.8%. 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. MNST has an operating profit margin of 27.8%. Comparing net profit margins for companies with similar business models or in similar industries can yield valuable information as to which business is actually performing better. The company's net profit margin is 17.1%.
Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. One of the favorite tools of many value investors is analyzing price/book value ratios, as it provides a measure of the underlying value of a company's assets as compared to the valuation of its equity. MNST has a P/B ratio of 11.62 which 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. P/B value ratios are particularly useful to value investors, distressed or "vulture" investors, or any other investors purchasing beaten-down securities but are less useful to investors focused on growth stocks, purchasing IPOs, or investing in technology or other "asset-lite" companies. SEE: Investment Valuation Ratios: Price/Book Value Ratio
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.
The Consumer/Non-Cyclical sector (XLP) is down 0.1% on a good day for the market overall. The biggest movers in the sector so far are:
| Company | Market Cap | Percentage Change |
| Peet\'s Coffee & Tea, Inc. (Nasdaq:PEET) | $723.2 million | +6% |
| Estee Lauder Cos (NYSE:EL) | $20.44 billion | +3.4% |
| Post Holdings Inc (NYSE:POST) | $1.07 billion | -3.2% |
| J&J Snack Foods Corp. (Nasdaq:JJSF) | $1.06 billion | -2.7% |
| Snyder S Lance Inc (Nasdaq:LNCE) | $1.6 billion | -2.3% |
| United Natural Foods, Inc. (Nasdaq:UNFI) | $2.66 billion | -2.1% |
| Monster Beverage Corp (Nasdaq:MNST) | $12.67 billion | -2.1% |
Peet's Coffee & Tea (Nasdaq:PEET) is at $57.88 per share after an increase of 6%. So far today, 187,652 shares have changed hands. If a stock price makes a big move up or down, volume lets us know the significance of that 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. PEET has a low gross profit margin of 19.1%. Since gross profit margins tend to stay stable, sudden changes may indicate financial fraud, accounting irregularities or problems in the business. Operating margin for PEET is 5.6% and net margin is 4.1%, both low relative to its gross margin.
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 price/book value ratio is calculated by dividing the current stock price by the company's book value per share. PEET's P/B ratio of 4.12 shows that its share price is higher than its book value. This may be a sign that the company is overvalued. 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
Rising 3.4%, Estee Lauder (NYSE:EL) is currently trading at $54.40 per share. At 1.3 million shares, the company's volume so far today is 0.4 times its current three-month average. When a stock price moves up or down, watching the volume is a good way of identifying how significant that shift is. 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. EL has a relatively high gross profit margin of 79.2%. This may indicate that the company is over-pricing its products and/or services. EL has an operating profit margin of 9.4% and a net profit margin of 8.9%, both high compared to its gross profit 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 debt-equity (D/E) ratio is a leverage ratio. EL has a low debt-equity ratio of 42%. A low D/E ratio may be a sign that the company is not taking advantage of leverage to increase its profits. The D/E ratio is not a pure measurement of a company's debt because it includes operational liabilities in total liabilities.
Falling 3.2%, Post Holdings (NYSE:POST) is currently at a share price of $30.01. The company is trading at a volume of 30,911 shares. Yesterday, 144,776 shares changed hands. 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. 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 POST is 44.1%. Net profit margins are those generated from all phases of a business, including taxes. The company has a net profit margin of -55.6%. A negative net profit margin means the company spent more money than it made. Operating margin can be an important ratio for some investors, particularly those investing in weaker companies or companies in cyclical industries. POST's operating profit margin is 13.3%.
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. The price/earnings ratio is calculated by taking a stock price and dividing it by the earnings-per-share (EPS). The P/E ratio for POST is 45.3, above the industry average of 37.08. This could mean that the market is expecting big things over the next few months or years. From the investor's perspective, a stock with a lower ratio is relatively cheaper than a stock with a higher ratio. SEE: The P/E Ratio: A Good Market-Timing Indicator
After a decline of 2.7%, J&J Snack (Nasdaq:JJSF) has hit a share price of $54.65. At 14,189 shares, the company's volume so far today is 0.5 times the current daily average. The trading volume for a stock indicates the level of investor interest. 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. JJSF has a gross profit margin of 33.7%. A company's operating margin is calculated by dividing operating income by revenues. JJSF has an operating profit margin of 8.6%. Ideally, a company's profit margin should be stable or rising; declining profit margin should be cause for concern or further investigation. Net profit margin for the company is 7%.
Snyder S Lance (Nasdaq:LNCE) is currently trading at a share price of $23, a 2.3% decline. This morning, the company is trading a volume of 84,788 shares. Volume indicates the level of interest that investors have in a company at its current price. Margin ratios highlight companies that are worth further examination. The gross profit margin for LNCE is 37.2%. Operating margin is determined by taking operating income (income minus variable expenses) and dividing it by sales. LNCE's operating profit margin is 6.6%. Net profit margin is calculated by dividing net income by sales. Net margin is 2.5%.
Investment valuation ratios can be very useful in estimating whether a stock price is too high, reasonable or a bargain investment opportunity. The dividend yield is calculated by dividing a company's dividends per share by its stock price. LNCE has a dividend yield of 2.7%. 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: Guide To Stock-Picking Strategies: Income Investing
Currently trading at $53.30 per share, United Natural Foods (Nasdaq:UNFI) has fallen 2.1%. With 120,349 shares changing hands so far today, the company's volume is 0.6 times its average over the past three months. In technical analysis, trading volume is used to determine the strength of a market indicator. 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. UNFI has a low gross profit margin of 18.6%. This may mean that the company is struggling to control production costs, or that a low amount of earnings is being generated from revenues. UNFI's operating margin of 3.5% and net margin of 1.7% are low relative to its gross margin.
Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. The price/sales ratio measures a company's stock market price by its revenues. UNFI has a low P/S ratio of 0.48. Low P/S ratios can indicate unrecognized value potential - so long as other criteria like high profit margins, low debt levels and growth prospects are in place. A limitation of the P/S ratio is that the price component measures only stock market captialization, while sales are a function of the entire capital structure, potentially leading to wide differences between levered and unlevered companies.
Monster (Nasdaq:MNST) has decreased to $70.39 per share, a 2.1% fall. The company's volume for the day so far is 691,456 shares. This is less trading activity than there was yesterday. A stock's volume conveys how excited investors are about it. 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 MNST is 53.8%. 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. MNST has an operating profit margin of 27.8%. Comparing net profit margins for companies with similar business models or in similar industries can yield valuable information as to which business is actually performing better. The company's net profit margin is 17.1%.
Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. One of the favorite tools of many value investors is analyzing price/book value ratios, as it provides a measure of the underlying value of a company's assets as compared to the valuation of its equity. MNST has a P/B ratio of 11.62 which 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. P/B value ratios are particularly useful to value investors, distressed or "vulture" investors, or any other investors purchasing beaten-down securities but are less useful to investors focused on growth stocks, purchasing IPOs, or investing in technology or other "asset-lite" companies. SEE: Investment Valuation Ratios: Price/Book Value Ratio
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.
by
Investopedia Staff
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