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Tickers in this Article: CNC, PCYC, AFFY, BMRN, SIRO, ALKS, MDVN
The market is having a bad day so far: the Nasdaq has slipped 0.2%; the S&P 500 is down 0.3%; and the Dow is trading down 0.2%. The healthcare sector is the category of stocks relating to medical and healthcare goods or services. This sector includes hospital management firms, health maintenance organizations (HMOs), biotechnology and a variety of medical products. Stocks in the healthcare sector are often considered to be defensive because the products and services are essential. Even during economic downturns, people will still require medical aid and medicine to overcome illness. Having a consistent demand for goods and services makes this sector less sensitive to business cycle fluctuations.

The Healthcare sector (XLV) is down 0.1%, outperforming the market overall. Currently, the biggest movers in the sector are:
CompanyMarket CapPercentage Change
Centene (NYSE:CNC).16 billion-6.6%
Pharmacyclics (Nasdaq:PCYC).34 billion-5.1%
Affymax (Nasdaq:AFFY)3.8 million+4.3%
BioMarin Pharmaceutical (Nasdaq:BMRN).69 billion-3.2%
Sirona Dental Systems (Nasdaq:SIRO).03 billion-2.7%
Alkermes (Nasdaq:ALKS).34 billion+2.3%
Medivation (Nasdaq:MDVN).58 billion-2.2%
Broker Summary: Fidelity Online Brokerage

Falling 6.6%, Centene (NYSE:CNC) is currently at a share price of $39.04. At 1.7 million shares, the company's volume so far today is whereas yesterday, volume was only 467,781 shares. A stock's volume conveys how excited investors are about it. Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. In a nutshell, the price/sales ratio shows how much Wall Street values every dollar of the company's sales. CNC has a low P/S ratio of 0.23. Low P/S ratios are more attractive than high ratios because this indicates that an investor is paying less for each dollar of sales. 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.

At $59.70, Pharmacyclics (Nasdaq:PCYC) has slipped 5.1%. So far today, the company's volume is 560,718 shares. This is 0.9 times its current daily average. Volume is used to evaluate how meaningful the price movement of a stock 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. The price/book value ratio is one of the more common methods of determining whether a stock is fairly valued. PCYC has a P/B ratio of 28.43 which 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

Rising 4.3%, Affymax (Nasdaq:AFFY) is currently trading at $17.69 per share. The company's volume for the day so far is 1.1 million shares, one times the average volume over the last three months. The trading volume for a stock indicates the level of investor interest. 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-equity (D/E) ratio compares the total liabilities for a company to its total shareholder equity. AFFY has a low debt-equity ratio of 12%. Companies with low D/E ratios are more attractive to investors because they are better able to protect their business interests in times of decline. The D/E ratio is not a pure measurement of a company's debt because it includes operational liabilities in total liabilities.

Currently trading at $36.72 per share, BioMarin Pharmaceutical (Nasdaq:BMRN) has fallen 3.2%. The company is currently trading a volume of 515,827 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. 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 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. BMRN has a low capitalization ratio of 24.5%. Low leverage is a significant balance sheet strength, a sign of a less risky investment. Prudent use of leverage (debt) increases the financial resources available to a company for growth and expansion.

Sirona Dental Systems (Nasdaq:SIRO) has fallen 2.7% and is currently trading at $53.52 per share. So far today, the company's volume is 870,258 shares,. When a stock price moves up or down, watching the volume is a good way of identifying how significant that shift is. Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. There are generally two price/earnings ratios calculated: the first, called the trailing Price/Earnings ratio, is calculated using the previous years actual earnings; the second, called forward Price/Earnings ratio, is calculated using the next year's estimated earnings. Relative to the industry P/E ratio of 45.31, SIRO's 25.5 is low. Companies with low P/E ratios may find it easier to surprise the market to the upside, even if their financial performance is not as strong as that of companies with high P/E ratios. 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

Alkermes (Nasdaq:ALKS) has risen 2.3% and is currently trading at $18.26 per share. The company's volume for the morning is 366,072 shares. This is consistent with its current daily average. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. 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 ratio shows the proportion of assets that a company is financing through debt. ALKS has a low debt ratio of 39%. 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.

Medivation (Nasdaq:MDVN) is down 2.2% to reach $94.92 per share. At 70,406 shares, the company's volume so far today is 0.2 times the current three-month average. 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. 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 MDVN is a high 30.57. 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.

The Bottom Line No matter the economic climate, Wall Street will always have stocks that make major moves each week. 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.

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