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Big Movers on the Financial Sector Today
This morning's trading has marked a bad day for the market so far. The Nasdaq is down 0.1%; the S&P 500 has slipped 0.1%; and the Dow is trading down 0.2%. The financial sector is the category of stocks containing firms that provide financial services to commercial and retail customers. This sector includes banks, investment funds, insurance companies and real estate. Financial services perform best in low interest rate environments. A large portion of this sector generates revenue from mortgages and loans, which gain value as interest rates drop. Furthermore, when the business cycle is in an upswing, the financial sector benefits from additional investments. Improved economic conditions usually lead to more capital projects and increased personal investing. New projects require financing, which usually leads to a larger number of loans.
The Financial sector (XLF) is down 0.5%, underperforming the market overall. The current biggest movers in the sector are:
Beginner's Guide To FXCM And Trading Station
Shares of StanCorp Financial Group (NYSE:SFG) are currently trading at $32.85, a steep decline of 11.4%. The company is currently trading a volume of 475,850 shares. Volume indicates the level of interest that investors have in a company at its current price. 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 measurement of how much suppliers, lenders, creditors and obligors have committed to the company versus what the shareholders have committed. SFG has a low debt-equity ratio of 27%. This shows that the company's assets are financed primarily through equity. This easy-to-calculate ratio provides a general indication of a company's equity-liability relationship and is helpful to investors looking for a quick take on a company's leverage.
Currently trading at $41.86 per share, State Street (NYSE:STT) has fallen 5.2%. At 3.6 million shares, the company's volume so far today is 1.3 times its current three-month average. If a stock price makes a big move up or down, volume lets us know the significance of that move. Looking at a company's valuation ratios is a good way of getting a basic idea as to its value as an investment. A company's price/earnings ratio (P/E ratio) provides a measure of how expensive or cheap a stock is. STT is in line with the industry average with a P/E ratio of 11.9. High P/E stocks could be "growth" stocks, while low PE stocks may be "value" stocks. SEE: Understanding The P/E Ratio
China Life Insurance Company Ltd (NYSE:LFC) is at $41.57 per share after an increase of 2.4%. The company's volume is currently 178,077 shares. This is less trading activity than there was yesterday. In technical analysis, trading volume is used to determine the strength of a market indicator. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. The price/earnings to growth (PEG) ratio is calculated by dividing the price/earnings ratio by growth in earnings-per-share; the lower the PEG ratio, the more reasonably valued the security. PEG ratio for LFC is consistent with the industry average at 1.23. Because of the adjustment for earnings growth rate, the PEG ratio is somewhat more useful than many formulas for comparing companies in different industries.
After a decline of 1.9%, Infinity Property and (Nasdaq:IPCC) has hit a share price of $57.62. At 2,936 shares, the company's volume so far today is 0.1 times the current daily average. 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. Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. The price/book value ratio is one of the more common methods of determining whether a stock is fairly valued. IPCC's stock is trading for more than its book value with a P/B ratio of 1.02. This high share price relative to asset value is likely to indicate that the company has been earning a very high return on its assets. P/B has its shortcomings but is still widely used as a valuation metric, more relevant for use by investors looking at capital-intensive or finance-related businesses, such as banks; book value does not carry much meaning for service-based firms with few tangible assets. SEE: How Buybacks Warps The Price-To-Book Ratio
Virtus Investment Partners (Nasdaq:VRTS) is down 1.9% to reach $80.09 per share. This morning, the company is trading a volume of 9,742 shares. The trading volume for a stock indicates the level of investor interest. Understanding investment valuation ratios allows the investor to assess the true value of an individual stock. A price/sales ratio is derived by dividing stock market price by company sales. VRTS has a high P/S ratio of 2.98. 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.
After rising 1.8%, Credit (Nasdaq:CACC) is currently trading at a share price of $95.85. The company's volume is currently 8,493 shares for the day, 0.3 times the average volume over the last three months. A stock's volume conveys how excited investors are about it. 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 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 CACC is 70.7%, which is relatively high. As such, the company is highly leveraged and not highly liquid. 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.
iShares Dow Jones Transport. Avg (NYSE:IYT) has fallen 1.6% and is currently trading at $90.75 per share. The company's volume for the day so far is 247,261 shares. Yesterday, volume was only 236,471 shares. Volume is an important indicator because it indicates how significant a price shift is. 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. For investors primarily interested in the income a stock can generate, the dividend yield is an important determinant of how attractive a stock is. IYT's dividend yield of 1.5% is fairly low. A company with a low dividend yield may be a safer investment in the long run. A higher dividend yield may indicate a risk of a fall in the price of the security, or a cut in the level of dividend payments, either of which would have the effect of dropping future returns. SEE: Guide To Stock-Picking Strategies: Income Investing
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 Financial sector (XLF) is down 0.5%, underperforming the market overall. The current biggest movers in the sector are:
| Company | Market Cap | Percentage Change |
| StanCorp Financial Group, Inc. (NYSE:SFG) | $1.65 billion | -11.4% |
| State Street (NYSE:STT) | $21.57 billion | -5.2% |
| China Life Insurance Company Ltd. (ADR) (NYSE:LFC) | $76.47 billion | +2.4% |
| Infinity Property and Casualty Corp. (Nasdaq:IPCC) | $694 million | -1.9% |
| Virtus Investment Partners Inc (Nasdaq:VRTS) | $635.9 million | -1.9% |
| Credit Acceptance Corp. (Nasdaq:CACC) | $2.41 billion | +1.8% |
| iShares Dow Jones Transport. Avg. (ETF) (NYSE:IYT) | $567.5 million | -1.6% |
Shares of StanCorp Financial Group (NYSE:SFG) are currently trading at $32.85, a steep decline of 11.4%. The company is currently trading a volume of 475,850 shares. Volume indicates the level of interest that investors have in a company at its current price. 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 measurement of how much suppliers, lenders, creditors and obligors have committed to the company versus what the shareholders have committed. SFG has a low debt-equity ratio of 27%. This shows that the company's assets are financed primarily through equity. This easy-to-calculate ratio provides a general indication of a company's equity-liability relationship and is helpful to investors looking for a quick take on a company's leverage.
Currently trading at $41.86 per share, State Street (NYSE:STT) has fallen 5.2%. At 3.6 million shares, the company's volume so far today is 1.3 times its current three-month average. If a stock price makes a big move up or down, volume lets us know the significance of that move. Looking at a company's valuation ratios is a good way of getting a basic idea as to its value as an investment. A company's price/earnings ratio (P/E ratio) provides a measure of how expensive or cheap a stock is. STT is in line with the industry average with a P/E ratio of 11.9. High P/E stocks could be "growth" stocks, while low PE stocks may be "value" stocks. SEE: Understanding The P/E Ratio
China Life Insurance Company Ltd (NYSE:LFC) is at $41.57 per share after an increase of 2.4%. The company's volume is currently 178,077 shares. This is less trading activity than there was yesterday. In technical analysis, trading volume is used to determine the strength of a market indicator. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. The price/earnings to growth (PEG) ratio is calculated by dividing the price/earnings ratio by growth in earnings-per-share; the lower the PEG ratio, the more reasonably valued the security. PEG ratio for LFC is consistent with the industry average at 1.23. Because of the adjustment for earnings growth rate, the PEG ratio is somewhat more useful than many formulas for comparing companies in different industries.
After a decline of 1.9%, Infinity Property and (Nasdaq:IPCC) has hit a share price of $57.62. At 2,936 shares, the company's volume so far today is 0.1 times the current daily average. 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. Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. The price/book value ratio is one of the more common methods of determining whether a stock is fairly valued. IPCC's stock is trading for more than its book value with a P/B ratio of 1.02. This high share price relative to asset value is likely to indicate that the company has been earning a very high return on its assets. P/B has its shortcomings but is still widely used as a valuation metric, more relevant for use by investors looking at capital-intensive or finance-related businesses, such as banks; book value does not carry much meaning for service-based firms with few tangible assets. SEE: How Buybacks Warps The Price-To-Book Ratio
Virtus Investment Partners (Nasdaq:VRTS) is down 1.9% to reach $80.09 per share. This morning, the company is trading a volume of 9,742 shares. The trading volume for a stock indicates the level of investor interest. Understanding investment valuation ratios allows the investor to assess the true value of an individual stock. A price/sales ratio is derived by dividing stock market price by company sales. VRTS has a high P/S ratio of 2.98. 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.
After rising 1.8%, Credit (Nasdaq:CACC) is currently trading at a share price of $95.85. The company's volume is currently 8,493 shares for the day, 0.3 times the average volume over the last three months. A stock's volume conveys how excited investors are about it. 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 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 CACC is 70.7%, which is relatively high. As such, the company is highly leveraged and not highly liquid. 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.
iShares Dow Jones Transport. Avg (NYSE:IYT) has fallen 1.6% and is currently trading at $90.75 per share. The company's volume for the day so far is 247,261 shares. Yesterday, volume was only 236,471 shares. Volume is an important indicator because it indicates how significant a price shift is. 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. For investors primarily interested in the income a stock can generate, the dividend yield is an important determinant of how attractive a stock is. IYT's dividend yield of 1.5% is fairly low. A company with a low dividend yield may be a safer investment in the long run. A higher dividend yield may indicate a risk of a fall in the price of the security, or a cut in the level of dividend payments, either of which would have the effect of dropping future returns. SEE: Guide To Stock-Picking Strategies: Income Investing
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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