Filed Under: ,
Tickers in this Article: HCN, VNO, PSB, VAC, BXP, SLG, TCO
It's been a bad day for the market after the morning's trading. The Nasdaq is trading down 0.2%; the S&P 500 has slipped 0.4%; and the Dow has decreased 0.5%.

The Real Estate Operations sector (IYR) is currently lagging behind the overall market, down 0.9%, and its current biggest movers are:
CompanyMarket CapPercentage Change
Health Care REIT (NYSE:HCN)$13.66 billion-3%
PS Business Parks (NYSE:PSB)$1.66 billion-1.1%
Marriott Vacations (NYSE:VAC)$1.05 billion+1%
Boston Properties (NYSE:BXP)$16.79 billion-0.9%
SL Green (NYSE:SLG)$7.27 billion-0.9%
Taubman Centers (NYSE:TCO)$4.56 billion-0.9%
Broker Summary: Charles Schwab Online Brokerage

At $57.95, Health Care REIT (NYSE:HCN) has slipped 3%. This morning, the company is trading a volume of 1.9 million shares. 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 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. In a nutshell, the price/sales ratio shows how much Wall Street values every dollar of the company's sales. The P/S ratio for HCN is a high 7.62. 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.

The company's volume is currently 122,950 shares for the day, 0.1 times its average over the past three months. Volume is used to evaluate how meaningful the price movement of a stock is. Understanding investment valuation ratios allows an investor to assess the true value of an individual stock. The price/earnings to growth (PEG) ratio compares a company's P/E ratio to its earnings-per-share growth rate, which tells you whether or not you are getting a good value when purchasing a stock with a high price/earnings ratio (P/E ratio). VNO has a PEG ratio of -6.97. While P/E ratios are important indicators of market value, a high P/E in and of itself is not bad because it may indicate a company whose earnings are growing very rapidly, so many investors look at the PEG ratio in order to get an idea of whether or not a particular P/E ratio is justified by underlying earnings growth.

Falling 1.1%, PS Business Parks (NYSE:PSB) is currently at a share price of $67.88. The company's volume for the day so far is 3,388 shares. This is a sign that there will be less trading activity than there was yesterday. Volume is an important indicator because it indicates how significant a price shift is. Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. 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. The D/E ratio for PSB is 92%. The D/E ratio percentage provides a much more dramatic perspective on a company's leverage position than the debt ratio percentage.

Marriott Vacations (NYSE:VAC) has moved up 1% and is currently trading at $30.75 per share. The company's volume is currently 105,387 shares for the day, consistent with its 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. 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. The debt ratio for VAC is 56.4%. 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.

Boston Properties (NYSE:BXP) is trading at $110.31 per share, down 0.9%. The company's volume for the day so far is 113,690 shares. When a stock price moves up or down, watching the volume is a good way of identifying how significant that shift is. Valuation ratios like 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 are useful in determining how attractive a potential or existing investment is. A simple P/E ratio can reveal the stock's real market value and show how the valuation compares to its industry group or a benchmark like the S&P 500 Index. BXP's P/E ratio of 46.4 is above the industry average of 14.24. Generally speaking, the higher the P/E ratio, the higher the market expectations for a company's future performance. 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

SL Green (NYSE:SLG) is currently trading at a share price of $79.94, a 0.9% decline. So far today, the company's volume is 120,555 shares, 0.3 times the average volume over the last three months. If a stock price moves on high volume, this means that the change is a significant one. 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. A company's capitalization (not to be confused with its market capitalization) is the term used to describe the makeup of a company's permanent or long-term capital, which consists of both long-term debt and shareholders' equity. The capitalizion ratio of 0.3% is on the low end. A very low capitalization ratio might be a sign that the company is stagnating and reducing the potential earnings for shareholders. 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.

Taubman Centers (NYSE:TCO) has decreased to $76.87 per share, a 0.9% fall. The company's volume is currently 58,885 shares. At this rate, trading activity will likely be down from yesterday when 668,998 shares changed hands. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. Looking at a company's valuation ratios is a good way of getting a basic idea as to its value as an investment. Dividend yield measures the income that a stock will generate for an investor. TCO's dividend yield is 2.4%. To calculate the dividend yield, divide the level of dividends by the stock price; the higher the yield, the more attractive the security. SEE: Dividend Yield For The Downturn

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. However, these fundamental metrics must be analyzed with historic data, industry information in addition to firm specific financial statements.

comments powered by Disqus

Trading Center