The morning has been bad for the market. The Nasdaq has decreased 0.4%; the S&P 500 has slipped 0.8%; and the Dow is down 0.8%.
The Gold and Silver sector (SLV) is currently lagging behind the overall market, down 0.8%, and its current biggest movers are:
|Company||Market Cap||Percentage Change|
|Seabridge Gold, Inc. (USA) (NYSE:SA)||$621.8 million||+4.4%|
|McEwen Mining Inc (NYSE:MUX)||$522.1 million||+3.5%|
|Kinross Gold Corporation (USA) (NYSE:KGC)||$9.05 billion||-1.4%|
|Royal Gold, Inc. (Nasdaq:RGLD)||$4.47 billion||+1.3%|
|Harmony Gold Mining Co. (ADR) (NYSE:HMY)||$4.17 billion||+1.2%|
|Newmont Mining (NYSE:NEM)||$21.82 billion||-1%|
|Gold Fields Limited (ADR) (NYSE:GFI)||$9.32 billion||+0.9%|
Forex Broker Summary: Forex Capital Markets (FXCM)
Seabridge Gold, Inc (NYSE:SA) has moved up 4.4% and is currently trading at $14.94 per share. So far today, the company's volume is 89,953 shares. Volume is used to evaluate how meaningful the price movement of a stock is. 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 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 SA is a low 5%. 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.
McEwen Mining (NYSE:MUX) has risen 3.5% to hit a current price of $2.95 per share. At 624,844 shares, the company's volume so far today is consistent with its current three-month average. If a stock price moves on high volume, this means that the change is a significant one. 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/book value ratio is calculated by dividing the current stock price by the company's book value per share. MUX has a P/B ratio of 0.57, which shows that its book value is higher than its share price. This could mean that either the market believes the asset value is overstated, or the company is earning a very poor (even negative) 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
Slipping 1.4%, Kinross Gold Corporation (NYSE:KGC) is currently trading at $7.83 per share. The company's volume for the day so far is nine million shares. This is on pace to fall short of yesterday's volume of 22.8 million shares. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. 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. 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. KGC has a dividend yield of 2%. For income-oriented investors such as retirees, a stock with a high dividend yield may be more attractive than a stock with a low dividend yield. SEE: Guide To Stock-Picking Strategies: Income Investing
After an increase of 1.3%, Royal Gold (Nasdaq:RGLD) has reached a current price of $77.02. So far today, the company's volume is 174,959 shares, 0.3 times its current daily average. Volume indicates the level of interest that investors have in a company at its current price. 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/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. The P/S ratio for RGLD is a high 14.59. 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.
Harmony Gold Mining Co (NYSE:HMY) is currently trading at $9.82 per share, a 1.2% increase. The company is currently trading a volume of 649,204 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. 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 easy-to-calculate debt ratio is helpful to investors looking for a quick take on the leverage for a company. HMY has a debt ratio of 21.8%, which is fairly low. 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. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.
Falling 1%, Newmont Mining (NYSE:NEM) is currently at a share price of $43.95. So far today, the company's volume is 1.6 million shares, 0.3 times its average over the past three months. The trading volume for a stock indicates the level of investor interest. Understanding investment valuation ratios allows an investor to assess the true value of an individual stock. The debt-equity (D/E) ratio compares the total liabilities for a company to its total shareholder equity. NEM's D/E ratio is 60%. The D/E ratio is not a pure measurement of a company's debt because it includes operational liabilities in total liabilities.
Gold Fields Limited (NYSE:GFI) has increased to a share price of $13.01, a 0.9% rise. So far today, the company's volume is 1.3 million shares. This is on pace to fall short of yesterday's volume of 5.6 million shares. 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. Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. The capitalization ratio is calculated by dividing long-term debt by the sum of long-term debt and shareholders' equity. GFI has a fairly low capitalization ratio of 19%. A low capitalization ratio can signify a failure to leverage equity into investment, missing valuable opportunities for growth and expansion. This ratio is considered to be one of the more meaningful of the "debt" ratios - it delivers the key insight into the use of leverage by a company.
The Bottom Line On any given day, a particular stock may see positive or negative change in its share price. Paying close attention to the previous ratios will help you identify key times to adjust your strategy. 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.