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CNOOC Limited and Other Energy Stocks Making Big Moves on September 17, 2012
This morning's trading has marked a bad day for the market so far. The Nasdaq is down 0.2%; the S&P 500 has declined 0.2%; and the Dow has decreased 0.2%. The energy sector is the category of stocks that relate to producing or supplying energy. This sector includes companies involved in the exploration and development of oil or gas reserves, oil and gas drilling, or integrated power firms. Performance in the sector is largely driven by the supply and demand for worldwide energy. Energy producers will do very well during times of high oil and gas prices, but will earn less when the value of energy drops. Furthermore, this sector is sensitive to political events, which historically have driven changes in the price of oil.
Despite a bad day for the market overall so far, the Energy sector (XLE) is up 0.2% and its biggest movers are currently:
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Shares of Inergy (NYSE:NRGY) are currently trading at $18.38, a steep decline of 16.2%. So far today, the company's volume is 253,844 shares. This is about the same trading activity as there was yesterday. 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. 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 capitalization ratio is calculated by dividing long-term debt by the sum of long-term debt and shareholders' equity. NRGY's capitalization ratio is 32.3%. A low level of debt and a healthy proportion of equity in a company's capital structure is an indication of financial fitness.
Falling 4%, Marathon (NYSE:MPC) is currently at a share price of $53.36. So far today, the company's volume is 1.5 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. 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. The price/earnings to growth (PEG) ratio divides a company's P/E ratio by its growth rate of earnings-per-share. MPC's PEG ratio of 1.07 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.
Valero (NYSE:VLO) has decreased to $32.43 per share, a 3.9% fall. At 4.3 million shares, the company's volume so far today is in keeping with the average volume over the past three months. A stock's volume conveys how excited investors are about it. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. The price/book value ratio is one of the more common methods of determining whether a stock is fairly valued. VLO has a P/B ratio of 1.08 which shows that its share price is higher than its book value. 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: Investment Valuation Ratios: Price/Book Value Ratio
Rising 3.8%, Gulfport (Nasdaq:GPOR) is currently trading at $32.75 per share. The company's volume for the morning is 884,567 shares. This is 0.7 times its average daily volume. 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. 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 price by its revenues. The P/S ratio for GPOR is a high 4.45. 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.
Currently trading at $92.70 per share, China Petroleum & Chemical Corp (NYSE:SNP) has fallen 3%. So far today, 53,533 shares have changed hands, lighter than yesterday's volume of 147,424 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. 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. A simple P/E ratio can reveal the stock's real market value and show how the valuation compares to its industry group or a benchmark like the S&P 500 Index. SNP's P/E ratio of 7.4 is consistent with the industry average. 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
CNOOC Limited (NYSE:CEO) has moved up 2.1% and is currently trading at $208.41 per share. The company's volume for the day so far is 55,720 shares. When a stock price moves up or down, watching the volume is a good way of identifying how significant that shift is. 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. 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. The capitalizion ratio of 9.4% is on the low end. 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.
Slipping 2.1%, Oiltanking (NYSE:OILT) is currently trading at $39.80 per share. The company's volume is currently 26,553 shares for the day, 1.2 times 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 provide investors with an estimation, albeit a simplistic one, of the value of a stock. 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). OILT's PEG ratio is 0.59. Because of the adjustment for earnings growth rate, the PEG ratio is somewhat more useful than many formulas for comparing companies in different industries.
The Bottom Line No matter the economic climate, Wall Street will always have stocks that make major moves each week. Paying close attention to the previous ratios will help you identify key times to adjust your strategy. Keep in mind that all these ratios should be compared against historical numbers and industry information in order to get a more complete picture.
Despite a bad day for the market overall so far, the Energy sector (XLE) is up 0.2% and its biggest movers are currently:
| Company | Market Cap | Percentage Change |
| Inergy (NYSE:NRGY) | $2.89 billion | -16.2% |
| Marathon (NYSE:MPC) | $18.81 billion | -4% |
| Valero (NYSE:VLO) | $18.62 billion | -3.9% |
| Gulfport (Nasdaq:GPOR) | $1.76 billion | +3.8% |
| China Petroleum & Chemical Corp (NYSE:SNP) | $82.99 billion | -3% |
| CNOOC Limited (NYSE:CEO) | $91.11 billion | +2.1% |
| Oiltanking (NYSE:OILT) | $790.8 million | -2.1% |
Shares of Inergy (NYSE:NRGY) are currently trading at $18.38, a steep decline of 16.2%. So far today, the company's volume is 253,844 shares. This is about the same trading activity as there was yesterday. 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. 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 capitalization ratio is calculated by dividing long-term debt by the sum of long-term debt and shareholders' equity. NRGY's capitalization ratio is 32.3%. A low level of debt and a healthy proportion of equity in a company's capital structure is an indication of financial fitness.
Falling 4%, Marathon (NYSE:MPC) is currently at a share price of $53.36. So far today, the company's volume is 1.5 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. 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. The price/earnings to growth (PEG) ratio divides a company's P/E ratio by its growth rate of earnings-per-share. MPC's PEG ratio of 1.07 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.
Valero (NYSE:VLO) has decreased to $32.43 per share, a 3.9% fall. At 4.3 million shares, the company's volume so far today is in keeping with the average volume over the past three months. A stock's volume conveys how excited investors are about it. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. The price/book value ratio is one of the more common methods of determining whether a stock is fairly valued. VLO has a P/B ratio of 1.08 which shows that its share price is higher than its book value. 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: Investment Valuation Ratios: Price/Book Value Ratio
Currently trading at $92.70 per share, China Petroleum & Chemical Corp (NYSE:SNP) has fallen 3%. So far today, 53,533 shares have changed hands, lighter than yesterday's volume of 147,424 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. 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. A simple P/E ratio can reveal the stock's real market value and show how the valuation compares to its industry group or a benchmark like the S&P 500 Index. SNP's P/E ratio of 7.4 is consistent with the industry average. 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
CNOOC Limited (NYSE:CEO) has moved up 2.1% and is currently trading at $208.41 per share. The company's volume for the day so far is 55,720 shares. When a stock price moves up or down, watching the volume is a good way of identifying how significant that shift is. 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. 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. The capitalizion ratio of 9.4% is on the low end. 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.
Slipping 2.1%, Oiltanking (NYSE:OILT) is currently trading at $39.80 per share. The company's volume is currently 26,553 shares for the day, 1.2 times 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 provide investors with an estimation, albeit a simplistic one, of the value of a stock. 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). OILT's PEG ratio is 0.59. Because of the adjustment for earnings growth rate, the PEG ratio is somewhat more useful than many formulas for comparing companies in different industries.
The Bottom Line No matter the economic climate, Wall Street will always have stocks that make major moves each week. Paying close attention to the previous ratios will help you identify key times to adjust your strategy. 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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