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Citrix and More Big Movers in Technology on September 24, 2012
This morning's trading has marked a bad day for the market so far. The Nasdaq is trading down 0.7%; the S&P 500 has decreased 0.2%; and the Dow has slipped 0.2%. 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 Technology sector (XLK) is currently ahead of the overall market, down only 0.7%, and its biggest movers are currently:
Broker Summary: Fidelity Online Brokerage
Rambus (Nasdaq:RMBS) rose a significant 19.5% to reach $5.89 per share. So far today, 3.4 million shares of the company's stock have changed hands. Yesterday's volume was only 823,674 shares. 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 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. The price/book value ratio is one of the more common methods of determining whether a stock is fairly valued. RMBS' stock is trading for more than its book value with a P/B ratio of 1.7. 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. P/B value ratios are particularly useful to value investors, distressed or "vulture" investors, or any other investors purchasing beaten-down securities but are less useful to investors focused on growth stocks, purchasing IPOs, or investing in technology or other "asset-lite" companies. SEE: How Buybacks Warps The Price-To-Book Ratio
After a decline of 9.2%, Veeco Instruments (Nasdaq:VECO) has hit a share price of $31.74. The company's volume is currently 1.2 million shares for the day, 2.1 times its average over the past three months. 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. Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. The price/sales ratio measures a company's stock market price by its revenues. The P/S ratio for VECO is a high 1.83. In young companies, a high P/S ratio is a sign of sales growth that is expected to turn into earnings and cash flow. All things being equal, a low P/S ratio is good news for investors, while a very high one can be a warning sign.
Internet Initiative Japan Inc (Nasdaq:IIJI) has risen 7.7% and is currently trading at $12.48 per share. This morning, the company is trading a volume of 4,625 shares. The trading volume for a stock indicates the level of investor interest. 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. IIJI has a debt ratio of 54.8%. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.
Cymer (Nasdaq:CYMI) is currently trading at a share price of $52.13, a 5.6% decline. At 168,040 shares, the company's volume so far today is 0.6 times its current daily average. If a stock price moves on high volume, this means that the change is a significant one. 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. When used consistently and uniformly, the price/earnings to growth (PEG) ratio is an essential tool that adds dimension to the price/earnings ratio, allows comparisons across diverse industries and is always on the lookout for value. CYMI's PEG ratio of 3.19 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.
Falling 5.2%, Citrix (Nasdaq:CTXS) is currently at a share price of $76.97. So far today, the company's volume is one million shares. This is about the same trading activity as there was yesterday. A stock's volume conveys how excited investors are about it. 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. Perhaps one of the most widely-used stock analysis tools is the price-to-earnings ratio, or P/E. Compared to the industry average of 4.51, CTXS' P/E ratio of 42.5 is quite high. A company with a high P/E ratio will eventually have to live up to the high rating by substantially increasing its earnings, or the price will need to drop. From the investor's perspective, a stock with a lower ratio is relatively cheaper than a stock with a higher ratio. SEE: The P/E Ratio: A Good Market-Timing Indicator
Currently trading at $37.05 per share, Universal (Nasdaq:PANL) has fallen 5%. So far today, the company's volume is 544,484 shares, 0.9 times the average volume over the last three months. Volume is used to evaluate how meaningful the price movement of a stock is. 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 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. PANL has a P/B ratio of 4.88 which shows that its share price is higher 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. All else being equal, a stock with a low P/B value ratio is more attractive than a stock with a high ratio. SEE: Investment Valuation Ratios: Price/Book Value Ratio
At $106.80, Mellanox (Nasdaq:MLNX) has slipped 3.8%. So far today, 486,182 shares have changed hands. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. Investment valuation ratios can be very useful in estimating whether a stock price is too high, reasonable or a bargain investment opportunity. In a nutshell, the price/sales ratio shows how much Wall Street values every dollar of the company's sales. MLNX's P/S ratio of 7.91 is on the high side. This could be a good sign if the share price increases. 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 The nature of the market is such that stocks will have good days and bad days. Daily stock performance should be weighed against historical performance and put in context of the market overall. Keep in mind that all these ratios should be compared against historical numbers and industry information in order to get a more complete picture.
The Technology sector (XLK) is currently ahead of the overall market, down only 0.7%, and its biggest movers are currently:
| Company | Market Cap | Percentage Change |
| Rambus (Nasdaq:RMBS) | $545.7 million | +19.5% |
| Veeco Instruments (Nasdaq:VECO) | $1.37 billion | -9.2% |
| Internet Initiative Japan Inc (Nasdaq:IIJI) | $957.2 million | +7.7% |
| Cymer (Nasdaq:CYMI) | $1.71 billion | -5.6% |
| Citrix (Nasdaq:CTXS) | $15.18 billion | -5.2% |
| Universal (Nasdaq:PANL) | $1.81 billion | -5% |
| Mellanox (Nasdaq:MLNX) | $4.41 billion | -3.8% |
Rambus (Nasdaq:RMBS) rose a significant 19.5% to reach $5.89 per share. So far today, 3.4 million shares of the company's stock have changed hands. Yesterday's volume was only 823,674 shares. 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 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. The price/book value ratio is one of the more common methods of determining whether a stock is fairly valued. RMBS' stock is trading for more than its book value with a P/B ratio of 1.7. 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. P/B value ratios are particularly useful to value investors, distressed or "vulture" investors, or any other investors purchasing beaten-down securities but are less useful to investors focused on growth stocks, purchasing IPOs, or investing in technology or other "asset-lite" companies. SEE: How Buybacks Warps The Price-To-Book Ratio
After a decline of 9.2%, Veeco Instruments (Nasdaq:VECO) has hit a share price of $31.74. The company's volume is currently 1.2 million shares for the day, 2.1 times its average over the past three months. 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. Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. The price/sales ratio measures a company's stock market price by its revenues. The P/S ratio for VECO is a high 1.83. In young companies, a high P/S ratio is a sign of sales growth that is expected to turn into earnings and cash flow. All things being equal, a low P/S ratio is good news for investors, while a very high one can be a warning sign.
Internet Initiative Japan Inc (Nasdaq:IIJI) has risen 7.7% and is currently trading at $12.48 per share. This morning, the company is trading a volume of 4,625 shares. The trading volume for a stock indicates the level of investor interest. 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. IIJI has a debt ratio of 54.8%. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.
Cymer (Nasdaq:CYMI) is currently trading at a share price of $52.13, a 5.6% decline. At 168,040 shares, the company's volume so far today is 0.6 times its current daily average. If a stock price moves on high volume, this means that the change is a significant one. 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. When used consistently and uniformly, the price/earnings to growth (PEG) ratio is an essential tool that adds dimension to the price/earnings ratio, allows comparisons across diverse industries and is always on the lookout for value. CYMI's PEG ratio of 3.19 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.
Falling 5.2%, Citrix (Nasdaq:CTXS) is currently at a share price of $76.97. So far today, the company's volume is one million shares. This is about the same trading activity as there was yesterday. A stock's volume conveys how excited investors are about it. 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. Perhaps one of the most widely-used stock analysis tools is the price-to-earnings ratio, or P/E. Compared to the industry average of 4.51, CTXS' P/E ratio of 42.5 is quite high. A company with a high P/E ratio will eventually have to live up to the high rating by substantially increasing its earnings, or the price will need to drop. From the investor's perspective, a stock with a lower ratio is relatively cheaper than a stock with a higher ratio. SEE: The P/E Ratio: A Good Market-Timing Indicator
Currently trading at $37.05 per share, Universal (Nasdaq:PANL) has fallen 5%. So far today, the company's volume is 544,484 shares, 0.9 times the average volume over the last three months. Volume is used to evaluate how meaningful the price movement of a stock is. 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 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. PANL has a P/B ratio of 4.88 which shows that its share price is higher 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. All else being equal, a stock with a low P/B value ratio is more attractive than a stock with a high ratio. SEE: Investment Valuation Ratios: Price/Book Value Ratio
At $106.80, Mellanox (Nasdaq:MLNX) has slipped 3.8%. So far today, 486,182 shares have changed hands. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. Investment valuation ratios can be very useful in estimating whether a stock price is too high, reasonable or a bargain investment opportunity. In a nutshell, the price/sales ratio shows how much Wall Street values every dollar of the company's sales. MLNX's P/S ratio of 7.91 is on the high side. This could be a good sign if the share price increases. 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 The nature of the market is such that stocks will have good days and bad days. Daily stock performance should be weighed against historical performance and put in context of the market overall. Keep in mind that all these ratios should be compared against historical numbers and industry information in order to get a more complete picture.
by
Investopedia Staff
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