So far today, the Nasdaq has climbed 0.2%, the S&P 500 remains relatively unchanged and the Dow has remained steady. The technology sector is a category of stocks relating to the research, development and/or distribution of technologically based goods and services. This sector contains businesses revolving around the manufacturing of electronics, creation of software, computers or products and services relating to information technology. The technology sector offers a wide arrange of products and services for both customers and other businesses. Consumer goods like personal computers, stereos and televisions are continually improved and upgraded, offering the latest technology to all users. Businesses receive information and services from software and database systems, which allow the companies to make strategic business decisions.
The biggest movers in the Technology sector (XLK) (unchanged) are:
|Company||Market Cap||Percentage Change|
|Changyou.com Limited(ADR) (Nasdaq:CYOU)||$1.27 billion||-11.7%|
|Hill-Rom Holdings, Inc. (NYSE:HRC)||$1.63 billion||+4.9%|
|Pegasystems Inc. (Nasdaq:PEGA)||$980.6 million||+4.5%|
|Akamai Technologies, Inc. (Nasdaq:AKAM)||$6.28 billion||+4.3%|
|Cerner (Nasdaq:CERN)||$12.24 billion||+3.7%|
|OSI Systems, Inc. (Nasdaq:OSIS)||$1.43 billion||+3.6%|
|SanDisk (Nasdaq:SNDK)||$9.79 billion||+3.3%|
Software Summary: Finviz.com Stock Screener
After a precipitous drop of 11.7%, Changyou.com (Nasdaq:CYOU) is now trading at a share price of $21.33. The company is trading at a volume of 349,760 shares. Volume is an important indicator because it indicates how significant a price shift is. 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. 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). CYOU has a PEG ratio of 0.54, which is consistent with the industry average. 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.
After rising 4.9%, Hill-Rom Holdings (NYSE:HRC) is currently trading at a share price of $27.55. At 275,458 shares, the company's volume so far today is 0.6 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. 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. HRC has a low capitalization ratio of 5.8%. A low capitalization ratio can signify a failure to leverage equity into investment, missing valuable opportunities for growth and expansion. The capitalization ratio is one of the more meaningful debt ratios because it focuses on the relationship of debt liabilities as a component of a company's total capital base, which is the capital raised by shareholders and lenders.
After an increase of 4.5%, Pegasystems (Nasdaq:PEGA) has reached a current price of $27.04. So far today, 71,488 shares have changed hands. 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. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. The price/earnings ratio is calculated by taking a stock price and dividing it by the earnings-per-share (EPS). PEGA has a P/E ratio of 115.6, high compared to the industry average of 74.73. 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: Profit With The Power Of Price-To-Earnings
Akamai Technologies (Nasdaq:AKAM) has increased to a share price of $36.95, a 4.3% rise. So far today, the company's volume is 2.6 million shares, 1.2 times the current three-month average. 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. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. A price/sales ratio is derived by dividing stock market price by company sales. AKAM's P/S ratio of 4.5 is on the high side. This could be a good sign if the share price increases. A limitation of the P/S ratio is that the price component measures only stock market captialization, while sales are a function of the entire capital structure, potentially leading to wide differences between levered and unlevered companies.
Cerner (Nasdaq:CERN) is at $74.11 per share after an increase of 3.7%. The company's volume for the day so far is 1.3 million shares. Yesterday, volume was only 961,304 shares. High volume indicates a lot of investor interest while low volume indicates the opposite. Understanding investment valuation ratios allows an investor to assess the true value of an individual stock. The price/book value ratio is especially important for value investors as it can provide an indication of the true value of a company's assets at a time when its business model may be failing. The P/B ratio for CERN is 4.94, indicating that the stock is trading for more than its book value. This high share price relative to asset value is likely to indicate that the company has been earning a very high return on its assets. One problem with the P/B value ratio is that it can be difficult to calculate the true book value of a company, so investors should be aware that many measures of book value may provide only a rough estimate, and should be taken with a grain of salt. SEE: Investment Valuation Ratios: Price/Book Value Ratio
OSI Systems (Nasdaq:OSIS) has risen 3.6% to hit a current price of $74.63 per share. The company's volume is currently 135,489 shares for the day, 0.9 times its current daily average. In technical analysis, trading volume is used to determine the strength of a market indicator. 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 shows the proportion of assets that a company is financing through debt. OSIS has a debt ratio of 42.1%, which is fairly low. 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. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.
Rising 3.3%, SanDisk (Nasdaq:SNDK) is currently trading at $41.86 per share. The company is currently trading a volume of 2.4 million shares. Volume indicates the level of interest that investors have in a company at its current price. 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 compares the total liabilities for a company to its total shareholder equity. The debt-equity ratio of 23% is relatively low. Companies with low D/E ratios are more attractive to investors because they are better able to protect their business interests in times of decline. 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.
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.