The morning has been good for the market. The Nasdaq is trading up 1%; the S&P 500 is up 0.5%; and the Dow has increased 0.6%. 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.
Outperforming the market overall, the Technology sector (XLK) is up 1% and its biggest movers so far today are:
|Company||Market Cap||Percentage Change|
|Sohu.com Inc. (Nasdaq:SOHU)||$1.32 billion||+14.8%|
|Cognizant Technology (Nasdaq:CTSH)||$17.62 billion||+11.7%|
|SINA Corporation (USA) (Nasdaq:SINA)||$2.96 billion||+8.1%|
|Stratasys, Inc. (Nasdaq:SSYS)||$1.36 billion||+5.1%|
|F5 Networks, Inc. (Nasdaq:FFIV)||$7.37 billion||+4.5%|
|Baidu (Nasdaq:BIDU)||$43.6 billion||+4.1%|
|Linkedin Corporation (NYSE:LNKD)||$11.21 billion||+3.3%|
Forex Broker Summary: UFXMarkets
Sohu.com (Nasdaq:SOHU) has soared 14.8% to reach a current price of $39.84 per share. So far today, the company's volume is 1.8 million shares. Volume is used to evaluate how meaningful the price movement of a stock is. 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/sales ratio measures a company's stock market price by its revenues. SOHU has a high P/S ratio of 2.32. This could be a good sign if the share price increases. 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.
After a big jump of 11.7%, Cognizant (Nasdaq:CTSH) is trading at $64.63 per share. So far today, the company's volume is 5.3 million shares, two times its current three-month average. Volume indicates the level of interest that investors have in a company at its current price. 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 ratio measures the leverage of a company, and a company's leverage is a good way to assess risk. CTSH has a low debt ratio of 23%. A low debt ratio means the company has more available cash flow. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.
SINA Corporation (Nasdaq:SINA) has increased to a share price of $48.18, a 8.1% rise. The company's volume for the day so far is 1.9 million shares. This is 0.9 times its average daily volume. If a stock price makes a big move up or down, volume lets us know the significance of that move. Understanding investment valuation ratios allows an investor to assess the true value of an individual stock. The price/book value ratio is calculated by dividing the current stock price by the company's book value per share. SINA's P/B ratio of 2.93 shows that its share price is higher than its book value. This may be a sign that the company is overvalued. 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
Stratasys (Nasdaq:SSYS) is currently trading at $66.88 per share, a 5.1% increase. So far today, 128,583 shares have changed hands, on pace to finish the day below yesterday's volume of 382,883 shares. A stock's volume conveys how excited investors are about it. Looking at a company's valuation ratios is a good way of getting a basic idea as to its value as an investment. 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 SSYS is a high 5.92. 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 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.
Increasing 4.5%, F5 Networks (Nasdaq:FFIV) is trading at $96.91 per share. So far today, 757,908 shares have changed hands. When a stock price moves up or down, watching the volume is a good way of identifying how significant that shift is. 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 easy-to-calculate debt ratio is helpful to investors looking for a quick take on the leverage for a company. FFIV's debt ratio of 30.2% is on the low side. 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.
After an increase of 4.1%, Baidu (Nasdaq:BIDU) has reached a current price of $129.95. With 2.7 million shares changing hands so far today, the company's volume is in keeping with its current three-month average. Volume is an important indicator because it indicates how significant a price shift is. 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 debt-equity (D/E) ratio is a leverage ratio. BIDU has a debt-equity ratio of 12%, which is on the low side. This shows that the company's assets are financed primarily through equity. The D/E ratio is not a pure measurement of a company's debt because it includes operational liabilities in total liabilities.
Linkedin (NYSE:LNKD) is at $112.06 per share after an increase of 3.3%. This morning, the company's volume is 2.2 million shares. This is in keeping with its current daily average. 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 P/E ratio has been used for ages by analysts and still remains one of the most relevant pieces of stock valuation. Compared to the industry average of 45.86, LNKD's P/E ratio of 986.5 is quite high. Usually, if a stock has a high P/E ratio, it indicates that the market expects the company to grow earnings quickly in the future. A high P/E ratio indicates a stock that is expensive, while a low P/E ratio indicates a stock that is cheap. SEE: Can Investors Trust the P/E Ratio?
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.