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Tickers in this Article: CLNE, NRGM, ATLS, AWR, BWP, AVA, EXLP
The morning has been good for the market. The Nasdaq has climbed 0.8%; the S&P 500 has risen 0.7%; and the Dow is up 0.6%. The utilities sector is a category of stocks for utilities such as gas and power. It contains companies such as electric, gas and water firms and integrated providers. Because utilities require significant infrastructure, these firms often carry large amounts of debt. With a high debt load, utilities companies become sensitive to changes in the interest rate. As interest rates rise or drop, the debt payments will increase or decrease. The utilities sector performs best when interest rates are falling or remain low.

Despite a good day for the overall market so far, the Utilities sector (XLU) is down 0.2% and its current biggest movers are:
CompanyMarket CapPercentage Change
Clean Energy Fuels Corp. (Nasdaq:CLNE)$1.27 billion-4.5%
Inergy Midstream LP (NYSE:NRGM)$1.71 billion-3.2%
Atlas Energy LP (NYSE:ATLS)$1.58 billion+3.2%
American States Water Co (NYSE:AWR)$787.9 million+3.1%
Boardwalk Pipeline Partners, LP (NYSE:BWP)$5.77 billion-2.9%
Avista Corp (NYSE:AVA)$1.63 billion-2.4%
Exterran Partners, L.P. (Nasdaq:EXLP)$975.9 million-2.3%
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At $13.98, Clean Energy (Nasdaq:CLNE) has slipped 4.5%. So far today, the company's volume is 1.3 million shares, 1.1 times the average volume over the last three months. High volume indicates a lot of investor interest while low volume indicates the opposite. 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. To a large degree, the debt-equity (D/E) ratio provides another vantage point on a company's leverage position, in this case, comparing total liabilities to shareholders' equity, as opposed to total assets in the debt ratio. CLNE's D/E ratio is 55%. 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.

After a decline of 3.2%, Inergy (NYSE:NRGM) has hit a share price of $22.25. So far today, the company's volume is 10,688 shares. This is 0.1 times the current daily average. 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. 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. Perhaps one of the most widely-used stock analysis tools is the price-to-earnings ratio, or P/E. NRGM has a P/E ratio of 127.7, high compared to the industry average of 23.89. Generally speaking, the higher the P/E ratio, the higher the market expectations for a company's future performance. High P/E stocks could be "growth" stocks, while low PE stocks may be "value" stocks. SEE: How To Use The P/E Ratio And PEG To Tell The Future Of A Stock

After rising 3.2%, Atlas (NYSE:ATLS) is currently trading at a share price of $31.79. This morning, 80,508 shares have been traded, which is likely to result in less activity than yesterday's volume of 288,560 shares. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. 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 capitalization ratio measures the debt component of the capital structure, or capitalization of a company (i.e., the sum of long-term debt liabilities and shareholder equity) to support operations and growth. ATLS' capitalization ratio of 56.8% is relatively high. The company may have trouble meeting operating and debt liabilities on time and surviving adverse economic conditions. Prudent use of leverage (debt) increases the financial resources available to a company for growth and expansion.

American States (NYSE:AWR) has risen 3.1% and is currently trading at $43.08 per share. So far today, 44,924 shares have changed hands. If a stock price makes a big move up or down, volume lets us know the significance of that move. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. 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. The P/B ratio for AWR is 1.96, indicating that the stock is trading for more 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 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 2.9%, Boardwalk Pipeline (NYSE:BWP) is currently trading at $26.94 per share. With 464,418 shares changing hands so far today, the company's volume is 0.4 times its current three-month average. Volume is an important indicator because it indicates how significant a price shift is. In making a decision about a potential or existing investment, valuation ratios are useful as a basis for seeing whether the stock price is too high, reasonable, or a bargain. Dividend yield measures the income that a stock will generate for an investor. BWP's dividend yield is 7.7%. 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: Investment Valuation Ratios: Dividend Yield

Avista (NYSE:AVA) has decreased to $27.10 per share, a 2.4% fall. This morning, the company's volume is 134,728 shares. This is 0.6 times its average daily volume. 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 price by its revenues. The P/S ratio for AVA is 0.94, which is relatively low. A company with a lower P/S ratio is generally considered more attractive, since investors are paying less for each dollar of sales. 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.

Currently trading at $22.56 per share, Exterran Partners (Nasdaq:EXLP) has fallen 2.3%. So far today, 51,840 shares have changed hands, lighter than yesterday's volume of 157,220 shares. A stock's volume conveys how excited investors are about it. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. The easy-to-calculate debt ratio is helpful to investors looking for a quick take on the leverage for a company. EXLP's debt ratio is 56.7%. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.

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. 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.

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