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Tickers in this Article: ITMN, ABAX, MAKO, CELG, BMRN, MASI, DVA
The Nasdaq has slipped 0.6%, the S&P 500 is unchanged and the Dow is trading up 0.1% after the morning's trading. 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) remains relatively unchanged overall, and these are the biggest movers in the sector so far:
CompanyMarket CapPercentage Change
InterMune (Nasdaq:ITMN)$522 million+7.2%
Abaxis (Nasdaq:ABAX)$809.6 million-3.5%
MAKO (Nasdaq:MAKO)$716.2 million+3.4%
Celgene (Nasdaq:CELG)$32.55 billion-2.7%
BioMarin Pharmaceutical (Nasdaq:BMRN)$4.74 billion+2.4%
Masimo (Nasdaq:MASI)$1.29 billion+2.4%
DaVita (NYSE:DVA)$9.51 billion-2.2%
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Increasing 7.2%, InterMune (Nasdaq:ITMN) is trading at $8.51 per share. The company's volume is currently 578,998 shares for the day, 0.8 times its current three-month average. Volume is used to evaluate how meaningful the price movement of a stock is. 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 capitalization ratio is calculated by dividing long-term debt by the sum of long-term debt and shareholders' equity. ITMN has a capitalization ratio of 59.6%, which is on the high end. A company considered too highly leveraged (too much debt) may find its freedom of action restricted by its creditors and/or have its profitability hurt by high interest costs. Prudent use of leverage (debt) increases the financial resources available to a company for growth and expansion.

Abaxis (Nasdaq:ABAX) is currently trading at a share price of $35.64, a 3.5% decline. The company's volume for the day so far is 134,773 shares. Volume indicates the level of interest that investors have in a company at its current price. Looking at a company's valuation ratios is a good way of getting a basic idea as to its value as an investment. The price/book value ratio, often expressed simply as "price-to-book", provides investors a way to compare the market value, or what they are paying for each share, to a conservative measure of the value of the firm. The P/B ratio for ABAX is 4.75, indicating that the stock is trading for more 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. All else being equal, a stock with a low P/B value ratio is more attractive than a stock with a high ratio. SEE: Using The Price-To-Book Ratio To Evaluate Companies

MAKO (Nasdaq:MAKO) is currently trading at $17.35 per share, a 3.4% increase. So far today, the company's volume is 502,887 shares, 0.3 times the current daily average. When a stock price moves up or down, watching the volume is a good way of identifying how significant that shift is. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. The price/sales ratio is used for spotting recovery situations or for double-checking that a company's growth has not become overvalued. The P/S ratio for MAKO is 11.23, which is relatively high. 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.

Falling 2.7%, Celgene (Nasdaq:CELG) is currently at a share price of $73.39. The company's volume for the day so far is 1.1 million shares. This is on pace to fall short of yesterday's volume of 2.9 million shares. The trading volume for a stock indicates the level of investor interest. Understanding investment valuation ratios allows an investor to assess the true value of an individual stock. 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 CELG is a low 42.6%. In other words, the company is less sensitive to changes in business or interest rates since less of its cash flow is dedicated to paying off loan expenses. 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.

BioMarin Pharmaceutical (Nasdaq:BMRN) has risen 2.4% to hit a current price of $39.28 per share. So far today, the company's volume is 878,262 shares, in keeping with the average volume over the past three months. 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 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. To a large degree, the debt-equity (D/E) ratio provides another vantage point on a company's leverage position, in this case, comparing total liabilities to shareholders' equity, as opposed to total assets in the debt ratio. The debt-equity ratio of 35% is relatively low. This shows that the company's assets are financed primarily through equity. This easy-to-calculate ratio provides a general indication of a company's equity-liability relationship and is helpful to investors looking for a quick take on a company's leverage.

Masimo (Nasdaq:MASI) has increased to a share price of $23.16, a 2.4% rise. The company is currently trading a volume of 74,028 shares. If a stock price makes a big move up or down, volume lets us know the significance of that move. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. The price/earnings to growth (PEG) ratio is calculated by dividing the price/earnings ratio by growth in earnings-per-share; the lower the PEG ratio, the more reasonably valued the security. MASI has a PEG ratio of 1.23. 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.

DaVita (NYSE:DVA) has fallen 2.2% and is currently trading at $98.32 per share. At 294,401 shares, the company's volume so far today is in keeping with 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. Valuation ratios allow the investor to make a quick determination as to a company's investment value. Price/earnings ratios (P/E ratios) provide a measure of the relative value of a stock. Compared to the industry average of 11.96, DVA's P/E ratio of 18.4 is quite high. 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: Understanding The P/E Ratio

The Bottom Line On any given day, a particular stock may see positive or negative change in its share price. It is important to weigh current activity against historical performance when making any investment decisions. Keep in mind that all these ratios should be compared against historical numbers and industry information in order to get a more complete picture.

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