The morning has been bad for the market. The Nasdaq has fallen 0.2%; the S&P 500 has fallen 0.2%; and the Dow has declined 0.2%.
The Real Estate Operations sector (IYR) is currently lagging behind the overall market, down 0.3%, and its current biggest movers are:
|Company||Market Cap||Percentage Change|
|E-House (China) Holdings Limited (NYSE:EJ)||$664.1 million||-6.7%|
|iStar Financial (NYSE:SFI)||$694 million||+4.1%|
|Forestar Group (NYSE:FOR)||$626 million||-3.4%|
|Jones Lang LaSalle (NYSE:JLL)||$3.69 billion||-3%|
|St. Joe (NYSE:JOE)||$2.06 billion||-2.7%|
|CBRE Group (NYSE:CBG)||$6.68 billion||-2.6%|
|Chesapeake (NYSE:CHSP)||$645.2 million||+2%|
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E-House (China) Holdings Limited (NYSE:EJ) has fallen 6.7% and is currently trading at $5.25 per share. So far today, the company's volume is 37,692 shares. A stock's volume conveys how excited investors are about it. 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 debt ratio shows the proportion of assets that a company is financing through debt. EJ has a low debt ratio of 22.2%. 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.
iStar Financial (NYSE:SFI) is currently trading at $8.64 per share, a 4.1% increase. The company's volume is currently 758,654 shares for the day, with trading activity in keeping with yesterday's on pace to finish the day below yesterday's volume of 1.8 million 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. 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 price/book value ratio provides a way of evaluating whether a stock is relatively cheap or expensive. SFI's P/B ratio of 0.52 indicates that its share price is lower than its book value. This is due to one of two possibilities: that the stock is being unfairly or incorrectly undervalued by investors because of some transitory circumstance and represents an attractive buying opportunity at a bargain price or that the market's low opinion and valuation of the company are correct, at least over the foreseeable future. To put things in perspective, should be made among companies in the same industry rather than across industries. SEE: How Buybacks Warps The Price-To-Book Ratio
Falling 3.4%, Forestar Group (NYSE:FOR) is currently at a share price of $17.43. The company's volume for the day so far is 43,066 shares. This is 0.3 times its current three-month 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. Looking at a company's valuation ratios is a good way of getting a basic idea as to its value as an investment. While measuring a price/earnings ratio (P/E ratio) is a popular valuation technique, the measure cannot be calculated for companies without earnings, so some investors analyze the price/sales ratio. FOR's P/S ratio of 3.81 is on the high side. 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.
Jones Lang LaSalle (NYSE:JLL) is currently trading at a share price of $81.28, a 3% decline. So far today, the company's volume is 82,670 shares, 0.3 times the average daily volume. Volume indicates the level of interest that investors have in a company at its current price. 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. One of the most important estimates of stock market valuation is the price/earnings ratio (P/E ratio). JLL's P/E ratio of 22.0 is above the industry average of 10.68. This could mean that the market is expecting big things over the next few months or years. To determine the P/E ratio, an investor divides the market price of the stock by the earnings-per-share (EPS) of the stock. SEE: How To Use The P/E Ratio And PEG To Tell The Future Of A Stock
St. Joe (NYSE:JOE) is trading at $21.75 per share, down 2.7%. This morning, the company is trading a volume of 128,532 shares. 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. 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. JOE has a debt-equity ratio of 9%, which is on the low side. 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 percentage provides a much more dramatic perspective on a company's leverage position than the debt ratio percentage.
Slipping 2.6%, CBRE Group (NYSE:CBG) is currently trading at $19.84 per share. So far today, the company's volume is two million shares, lighter than yesterday's volume of 7.6 million 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. 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 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. CBG has a high capitalization ratio of 69.3%. If the company is a company is in a highly competitive business and hobbled by high debt, it will find its competitors taking advantage of its problems to grab more market share. 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.
Chesapeake (NYSE:CHSP) is up 2% to reach a current price of $20.49 per share. This morning, the company is trading a volume of 206,972 shares. This is in keeping with its current three-month average. If a stock price moves on high volume, this means that the change is a significant one. 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 debt ratio is calculated by dividing total liabilities by total assets. CHSP's debt ratio of 47.7% is on the low side. This indicates that the company engages in conservative financing with opportunities to borrow in the future at no significant risk. 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.
The Bottom Line On any given day, a particular stock may see positive or negative change in its share price. 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.