The market has been doing well after the morning's trading. The Nasdaq is trading up 0.1%; the S&P 500 has increased 0.3%; and the Dow has climbed 0.4%.
Outperforming the market overall, the Services sector (IYC) is up 0.3% and its biggest movers so far today are:
|Company||Market Cap||Percentage Change|
|Liquidity Services (Nasdaq:LQDT)||$1.71 billion||-9.1%|
|Team Health (NYSE:TMH)||$1.95 billion||-5.4%|
|Panera (Nasdaq:PNRA)||$4.73 billion||+4.8%|
|Finish Line (Nasdaq:FINL)||$1.22 billion||-4.5%|
|Francesca\'s (Nasdaq:FRAN)||$1.27 billion||+4.3%|
|BT Group plc (NYSE:BT)||$29.56 billion||+4.1%|
|United Rentals (NYSE:URI)||$3.43 billion||-4%|
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Liquidity Services (Nasdaq:LQDT) has fallen 9.1% and is currently trading at $50.06 per share. The company's volume is currently 1.5 million shares for the day, 3.4 times its current daily average. If a stock is trading on low volume, then there is not much interest in the stock. On the other hand, if a stock is trading on high volume, then there is a lot of interest in the stock. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. The debt-equity (D/E) ratio is a leverage ratio. LQDT's debt-equity ratio of 18% is on the low end. This shows that the company's assets are financed primarily through equity. The D/E ratio percentage provides a much more dramatic perspective on a company's leverage position than the debt ratio percentage.
Team Health (NYSE:TMH) has decreased to $27.77 per share, a 5.4% fall. So far today, the company's volume is 913,875 shares. Yesterday's volume was only 241,641 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. Valuation ratios allow the investor to make a quick determination as to a company's investment value. 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). TMH's PEG ratio is 2.5. Because of the adjustment for earnings growth rate, the PEG ratio is somewhat more useful than many formulas for comparing companies in different industries.
After an increase of 4.8%, Panera (Nasdaq:PNRA) has reached a current price of $167.13. At 830,387 shares, the company's volume so far today is 2.9 times its current three-month average. Volume is used to evaluate how meaningful the price movement of a stock is. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. 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. PNRA has a high P/S ratio of 2.1. 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.
Falling 4.5%, Finish Line (Nasdaq:FINL) is currently at a share price of $23.41. The company's volume for the day so far is 646,414 shares. 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 dividend yield is calculated by dividing a company's dividends per share by its stock price. FINL's dividend yield of 1% is fairly low. If you are an income investor, this stock may not be attractive to you. 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
Francesca's (Nasdaq:FRAN) has risen 4.3% and is currently trading at $30.25 per share. At 776,099 shares, the company's volume so far today is 0.3 times the average daily volume. If a stock price makes a big move up or down, volume lets us know the significance of that move. Looking at a company's valuation ratios is a good way of getting a basic idea as to its value as an investment. Perhaps one of the most widely-used stock analysis tools is the price-to-earnings ratio, or P/E. The P/E ratio for FRAN is 37.2, above the industry average of 29.19. This could mean that the market is expecting big things over the next few months or years. A high P/E ratio indicates a stock that is expensive, while a low P/E ratio indicates a stock that is cheap. SEE: Profit With The Power Of Price-To-Earnings
BT Group plc (NYSE:BT) is currently trading at $37.76 per share, a 4.1% increase. So far today, 105,729 shares of the company's stock have changed hands. This is on pace to reach yesterday's trading volume of 260,652 shares. If a stock price moves on high volume, this means that the change is a significant one. Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. The debt ratio shows the proportion of assets that a company is financing through debt. BT's debt ratio of 94.6% is fairly high. This might mean that the company now has low borrowing capacity, which reduces it's financial flexibility. 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.
Currently trading at $35.56 per share, United Rentals (NYSE:URI) has fallen 4%. The company's volume for the day so far is 1.8 million shares, 0.6 times its average over the past three months. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. 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/book value ratio is one of the more common methods of determining whether a stock is fairly valued. The P/B ratio for URI is 2.36, indicating that the stock is trading for more than its book value. This may be a sign that the company is overvalued. A weakness of the P/B value ratio is that while the price component is easily determined by looking at the stock quote, the book value component is more difficult to estimate and more open to individual interpretation and analysis. SEE: Using The Price-To-Book Ratio To Evaluate Companies
The Bottom Line The nature of the market is such that stocks will have good days and bad days. Daily stock performance should be weighed against historical performance and put in context of the market overall. However, these fundamental metrics must be analyzed with historic data, industry information in addition to firm specific financial statements.