It's been a good morning for the market. The Nasdaq has moved up 0.8%; the S&P 500 is trading up 0.3%; and the Dow has risen 0.3%.
Despite a good day for the overall market so far, the Consumer/Non-Cyclical sector (XLP) is down 0.2% and its current biggest movers are:
|Company||Market Cap||Percentage Change|
|Blyth, Inc. (NYSE:BTH)||$639.5 million||+19.1%|
|Coca-Cola FEMSA, S.A.B. de C.V. (ADR) (NYSE:KOF)||$21.33 billion||+4.5%|
|Green Mountain Coffee Roasters Inc. (Nasdaq:GMCR)||$3.75 billion||+3.8%|
|Coca-Cola HBC S.A. (ADR) (NYSE:CCH)||$6.47 billion||+3.8%|
|Nu Skin Enterprises, Inc. (NYSE:NUS)||$2.54 billion||-2.6%|
|B&G Foods, Inc. (NYSE:BGS)||$1.36 billion||+1.4%|
|Ralcorp Holdings, Inc. (NYSE:RAH)||$3.63 billion||+1.3%|
Forex Broker Summary: Forex Capital Markets (FXCM)
Blyth (NYSE:BTH) rose a significant 19.1% to reach $44.16 per share. With 845,519 shares changing hands so far today, the company's volume is 3.7 times its average over the past three months. The trading volume for a stock indicates the level of investor interest. Looking at a company's valuation ratios is a good way of getting a basic idea as to its value as an investment. The dividend yield is calculated by dividing a company's dividends per share by its stock price. BTH has a low dividend yield of 0.5%. A company with a low dividend yield may be a safer investment in the long run. It is important to remember that while a higher dividend yield is more attractive, all else being equal, a higher dividend yield can also indicate greater perceived risk. SEE: Investment Valuation Ratios: Dividend Yield
Rising 4.5%, Coca-Cola FEMSA, S.A.B. de C.V (NYSE:KOF) is currently trading at $120.70 per share. So far today, the company's volume is 205,508 shares. Yesterday, volume was only 109,694 shares. If a stock price makes a big move up or down, volume lets us know the significance of that 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 value by its total revenues or alternatively, a company's price per share by its revenue per share. The P/S ratio for KOF is 2.46, which is relatively high. 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.
Green Mountain Coffee Roasters (Nasdaq:GMCR) has risen 3.8% and is currently trading at $25.02 per share. At 2.2 million shares, the company's volume so far today is 0.2 times its current daily average. A stock's volume conveys how excited investors are about it. Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. The debt ratio shows the proportion of assets that a company is financing through debt. GMCR has a low debt ratio of 33.6%. 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. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.
Coca-Cola HBC S.A (NYSE:CCH) has risen 3.8% to hit a current price of $18.50 per share. So far today, the company's volume is 21,479 shares. High volume indicates a lot of investor interest while low volume indicates the opposite. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. 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. CCH's D/E ratio is 77%. The D/E ratio is not a pure measurement of a company's debt because it includes operational liabilities in total liabilities.
Slipping 2.6%, Nu Skin Enterprises (NYSE:NUS) is currently trading at $41.40 per share. So far today, the company's volume is 2.1 million shares, 0.7 times the average volume over the last three months. 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. 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. The capitalization ratio is calculated by dividing long-term debt by the sum of long-term debt and shareholders' equity. NUS' capitalization ratio is 25.2%, which is relatively low. A very low capitalization ratio might be a sign that the company is stagnating and reducing the potential earnings for shareholders. 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.
B&G Foods (NYSE:BGS) is currently trading at $28.50 per share, a 1.4% increase. So far today, 244,305 shares of the company's stock have changed hands. 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. 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. BGS has a P/B ratio of 5.7 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. P/B has its shortcomings but is still widely used as a valuation metric, more relevant for use by investors looking at capital-intensive or finance-related businesses, such as banks; book value does not carry much meaning for service-based firms with few tangible assets. SEE: How Buybacks Warps The Price-To-Book Ratio
Ralcorp Holdings (NYSE:RAH) has moved up 1.3% and is currently trading at $66.50 per share. So far today, the company's volume is 167,615 shares, 0.3 times the current daily average. Volume is an important indicator because it indicates how significant a price shift is. 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. A price/sales ratio is derived by dividing stock market price by company sales. RAH has a low P/S ratio of 0.79. Highly levered companies are likely to have lower P/S ratios because the price aspect of this ratio only measures stock market valuation while sales is a function of both stock market and bond market capitalization. All things being equal, a low P/S ratio is good news for investors, while a very high one can be a warning sign.
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.