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Cirrus Logic and Other Big Movers In Semiconductors on September 28, 2012
The morning has been bad for the market. The Nasdaq has slipped 0.8%; the S&P 500 has fallen 0.7%; and the Dow has declined 0.7%.
The Semiconductors sector (XLK) is currently ahead of the overall market, down only 0.7%, and its biggest movers are currently:
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After rising 4.2%, GT Advanced Technologies (Nasdaq:GTAT) is currently trading at a share price of $5.52. The company's volume for the day so far is 2.4 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. 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/book value ratio is one of the more common methods of determining whether a stock is fairly valued. GTAT's stock is trading for more than its book value with a P/B ratio of 1.88. It is important to take the company's debt into account when using the P/B ratio as debt can boost a company's liabilities to the point where they wipe out much of the book value of its hard assets, creating artificially high P/B values. All else being equal, a stock with a low P/B value ratio is more attractive than a stock with a high ratio. SEE: How Buybacks Warps The Price-To-Book Ratio
At $12.95, Advantest Corp (NYSE:ATE) has slipped 4.1%. At 3,220 shares, the company's volume so far today is 1.5 times its current three-month average. 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. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. 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. ATE has a high P/S ratio of 1.53. 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.
Increasing 3.6%, Rambus (Nasdaq:RMBS) is trading at $5.49 per share. The company's volume is currently 390,538 shares. This is a sign that there will be less trading activity than there was yesterday. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. 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 compares the total liabilities for a company to its total shareholder equity. RMBS has a debt-equity ratio of 37%, which is on the low side. 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. The D/E ratio is not a pure measurement of a company's debt because it includes operational liabilities in total liabilities.
Peregrine Semiconductor Corp (Nasdaq:PSMI) is down 3.5% to reach $16.73 per share. So far today, the company's volume is 66,159 shares, consistent with its current daily 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.
First Solar (Nasdaq:FSLR) is currently trading at a share price of $22.30, a 3.5% decline. This morning, the company is trading a volume of 2.8 million shares. In technical analysis, trading volume is used to determine the strength of a market indicator. Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. 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. FSLR has a fairly low capitalization ratio of 12.3%. Low leverage is a significant balance sheet strength, a sign of a less risky investment. 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.
EZchip (Nasdaq:EZCH) has fallen 3.1% and is currently trading at $30.87 per share. With 90,960 shares changing hands so far today, the company's volume is 0.4 times the average volume over the last three months. When a stock price moves up or down, watching the volume is a good way of identifying how significant that shift is. Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. The debt ratio measures the leverage of a company, and a company's leverage is a good way to assess risk. The debt ratio for EZCH is a low 4.8%. 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.
Slipping 3%, Cirrus Logic (Nasdaq:CRUS) is currently trading at $38.50 per share. So far today, the company's volume is 705,178 shares. This is a sign that there will be less trading activity than there was yesterday. Volume indicates the level of interest that investors have in a company at its current price. Valuation ratios like 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 are useful in determining how attractive a potential or existing investment is. As with most ratios, comparisons of company price/earnings to growth ratios (PEG ratios) are most appropriate for similar companies. CRUS' PEG ratio of 1.8 is in line 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.
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.
The Semiconductors sector (XLK) is currently ahead of the overall market, down only 0.7%, and its biggest movers are currently:
| Company | Market Cap | Percentage Change |
| GT Advanced Technologies (Nasdaq:GTAT) | $629 million | +4.2% |
| Advantest Corp (NYSE:ATE) | $2.34 billion | -4.1% |
| Rambus (Nasdaq:RMBS) | $586.7 million | +3.6% |
| Peregrine Semiconductor Corp (Nasdaq:PSMI) | $544.4 million | -3.5% |
| First Solar (Nasdaq:FSLR) | $2.01 billion | -3.5% |
| EZchip (Nasdaq:EZCH) | $892 million | -3.1% |
| Cirrus Logic (Nasdaq:CRUS) | $2.56 billion | -3% |
After rising 4.2%, GT Advanced Technologies (Nasdaq:GTAT) is currently trading at a share price of $5.52. The company's volume for the day so far is 2.4 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. 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/book value ratio is one of the more common methods of determining whether a stock is fairly valued. GTAT's stock is trading for more than its book value with a P/B ratio of 1.88. It is important to take the company's debt into account when using the P/B ratio as debt can boost a company's liabilities to the point where they wipe out much of the book value of its hard assets, creating artificially high P/B values. All else being equal, a stock with a low P/B value ratio is more attractive than a stock with a high ratio. SEE: How Buybacks Warps The Price-To-Book Ratio
At $12.95, Advantest Corp (NYSE:ATE) has slipped 4.1%. At 3,220 shares, the company's volume so far today is 1.5 times its current three-month average. 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. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. 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. ATE has a high P/S ratio of 1.53. 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.
Increasing 3.6%, Rambus (Nasdaq:RMBS) is trading at $5.49 per share. The company's volume is currently 390,538 shares. This is a sign that there will be less trading activity than there was yesterday. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. 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 compares the total liabilities for a company to its total shareholder equity. RMBS has a debt-equity ratio of 37%, which is on the low side. 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. The D/E ratio is not a pure measurement of a company's debt because it includes operational liabilities in total liabilities.
Peregrine Semiconductor Corp (Nasdaq:PSMI) is down 3.5% to reach $16.73 per share. So far today, the company's volume is 66,159 shares, consistent with its current daily 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.
First Solar (Nasdaq:FSLR) is currently trading at a share price of $22.30, a 3.5% decline. This morning, the company is trading a volume of 2.8 million shares. In technical analysis, trading volume is used to determine the strength of a market indicator. Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. 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. FSLR has a fairly low capitalization ratio of 12.3%. Low leverage is a significant balance sheet strength, a sign of a less risky investment. 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.
EZchip (Nasdaq:EZCH) has fallen 3.1% and is currently trading at $30.87 per share. With 90,960 shares changing hands so far today, the company's volume is 0.4 times the average volume over the last three months. When a stock price moves up or down, watching the volume is a good way of identifying how significant that shift is. Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. The debt ratio measures the leverage of a company, and a company's leverage is a good way to assess risk. The debt ratio for EZCH is a low 4.8%. 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.
Slipping 3%, Cirrus Logic (Nasdaq:CRUS) is currently trading at $38.50 per share. So far today, the company's volume is 705,178 shares. This is a sign that there will be less trading activity than there was yesterday. Volume indicates the level of interest that investors have in a company at its current price. Valuation ratios like 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 are useful in determining how attractive a potential or existing investment is. As with most ratios, comparisons of company price/earnings to growth ratios (PEG ratios) are most appropriate for similar companies. CRUS' PEG ratio of 1.8 is in line 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.
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.
by
Investopedia Staff
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