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Tickers in this Article: KB, WF, CSH, SHG, MOH, COF, IBN
The market is doing well so far today. The Nasdaq has moved up 0.6%; the S&P 500 has climbed 0.5%; and the Dow has risen 0.6%. The financial sector is the category of stocks containing firms that provide financial services to commercial and retail customers. This sector includes banks, investment funds, insurance companies and real estate. Financial services perform best in low interest rate environments. A large portion of this sector generates revenue from mortgages and loans, which gain value as interest rates drop. Furthermore, when the business cycle is in an upswing, the financial sector benefits from additional investments. Improved economic conditions usually lead to more capital projects and increased personal investing. New projects require financing, which usually leads to a larger number of loans.

Underperforming the market overall, the Financial sector (XLF) is up 0.3%, and these are its current biggest movers:
CompanyMarket CapPercentage Change
KB Financial Group, Inc (NYSE:KB)$13 billion-3.2%
Woori Finance Holdings Co., Ltd (NYSE:WF)$8.07 billion-3.1%
Cash America International (NYSE:CSH)$1.13 billion+3%
Shinhan Financial Group Co., Ltd (NYSE:SHG)$15.56 billion-2.5%
Molina Healthcare (NYSE:MOH)$1.13 billion-2.3%
Capital One (NYSE:COF)$32.31 billion+1.9%
ICICI Bank Limited (NYSE:IBN)$20.24 billion-1.8%
Software Summary: Finviz.com Stock Screener

At $32.55, KB Financial Group, Inc (NYSE:KB) has slipped 3.2%. The company's volume is currently 37,498 shares for the day, in line with the current daily average. 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. 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. KB's P/E ratio of 6.0 is under the industry average of 9.91. A low P/E might arise due to substantial inherent risk of the firm and its operations, poor return on equity, or improper valuation of the market. 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

Woori Finance Holdings Co., Ltd (NYSE:WF) is trading at $29.09 per share, down 3.1%. The company is currently trading a volume of 3,290 shares. 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. 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. As with most ratios, comparisons of company price/earnings to growth ratios (PEG ratios) are most appropriate for similar companies. PEG ratio for WF is consistent with the industry average at 0.8. Because of the adjustment for earnings growth rate, the PEG ratio is somewhat more useful than many formulas for comparing companies in different industries.

Cash America International (NYSE:CSH) is up 3% to reach a current price of $39.70 per share. So far today, 154,304 shares have changed hands, with trading activity in keeping with yesterday's while it was 312,397 shares yesterday. In technical analysis, trading volume is used to determine the strength of a market indicator. Investment valuation ratios can be very useful in estimating whether a stock price is too high, reasonable or a bargain investment opportunity. 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. CSH has a P/B ratio of 1.19 which shows that its share price is higher than its book value. This implies that investors expect management to create more value from a given set of assets and/or that the market value of the firm's assets is significantly higher than their accounting value. 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

Currently trading at $63.96 per share, Shinhan Financial Group Co., Ltd (NYSE:SHG) has fallen 2.5%. This morning, the company is trading a volume of 8,188 shares. This is consistent with its current three-month average. A stock's volume conveys how excited investors are about it. Valuation ratios allow the investor to make a quick determination as to a company's investment value. The dividend yield is measured by taking the annual dividends per share and dividing that number by the stock price. SHG's dividend yield is 2%. A higher dividend yield may indicate a risk of a fall in the price of the security, or a cut in the level of dividend payments, either of which would have the effect of dropping future returns. SEE: Due Diligence On Dividends

Molina Healthcare (NYSE:MOH) has decreased to $23.74 per share, a 2.3% fall. So far today, the company's volume is 263,489 shares, in line with the 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. 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 debt-equity (D/E) ratio is a leverage ratio. MOH's debt-equity ratio of 36% is on the low end. A low D/E ratio may be a sign that the company is not taking advantage of leverage to increase its profits. The D/E ratio is not a pure measurement of a company's debt because it includes operational liabilities in total liabilities.

Capital One (NYSE:COF) has risen 1.9% and is currently trading at $56.68 per share. The company's volume for the day so far is 1.5 million shares. Volume is an important indicator because it indicates how significant a price shift is. 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. COF has a high debt ratio of 87.5%. This means that the company's cash flow is significantly impacted by paying off principal and interest and that any negative change in performance or rise in interest rates could result in default. 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.

ICICI Bank Limited (NYSE:IBN) is down 1.8% to reach $34.50 per share. So far today, the company's volume is 474,679 shares, with trading activity in keeping with yesterday's lighter than yesterday's volume of 970,470 shares. Volume indicates the level of interest that investors have in a company at its current price. Understanding investment valuation ratios allows an investor to assess the true value of an individual stock. 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. IBN's P/S ratio of 1.38 is on the high side. 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 compare P/S ratios for companies in the same industry, as ratios can vary quite widely for companies in different industries.

The Bottom Line No matter the economic climate, Wall Street will always have stocks that make major moves each week. It is important to weigh current activity against historical performance when making any investment decisions. 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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