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Companhia Energetica Minas Gerais Among Utilities' Biggest Movers on September 18, 2012
The Nasdaq has climbed 0.1%, the S&P 500 has been relatively flat and the Dow is up 0.1% so far today. The utilities sector is a category of stocks for utilities such as gas and power. It contains companies such as electric, gas and water firms and integrated providers. Because utilities require significant infrastructure, these firms often carry large amounts of debt. With a high debt load, utilities companies become sensitive to changes in the interest rate. As interest rates rise or drop, the debt payments will increase or decrease. The utilities sector performs best when interest rates are falling or remain low.
The biggest movers in the Utilities sector (XLU) (+0.2%) are:
Forex Broker Summary: Forex Capital Markets (FXCM)
Companhia Energetica Minas Gerais (NYSE:CIG) is at $13.89 per share after an increase of 3.5%. The company's volume is currently 1.8 million shares for the day, 0.2 times the average daily volume. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. 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. If the price/book value ratio of a stock is high, it may indicate that the stock is expensive, while a lower ratio may indicate that the stock is a bargain. CIG's stock is trading for more than its book value with a P/B ratio of 1.85. 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 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: Investment Valuation Ratios: Price/Book Value Ratio
Companhia de Saneamento Basico (NYSE:SBS) has risen 2.8% and is currently trading at $77.59 per share. The company is currently trading a volume of 166,451 shares. A stock's volume conveys how excited investors are about it. 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. Dividend yield is a way to measure how much cash flow you are getting for each dollar invested in an equity position - in other words, how much "bang for your buck" you are getting from dividends. SBS has a dividend yield of 2.7%. Just as with the yield on a bond or certificate of deposit, the higher the dividend yield, the higher the return to the investor. SEE: Due Diligence On Dividends
After rising 2.5%, Companhia Paranaense de Energia (NYSE:ELP) is currently trading at a share price of $16.58. So far today, 147,139 shares have changed hands, which is likely to result in less activity than yesterday's volume of 574,201 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. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual 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 ELP is a high 1.38. In young companies, a high P/S ratio is a sign of sales growth that is expected to turn into earnings and cash flow. 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.
Atlas (NYSE:ATLS) is down 1.9% to reach $34.87 per share. So far today, 74,922 shares have changed hands. This is consistent with its 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. 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 debt-equity (D/E) ratio compares the total liabilities for a company to its total shareholder equity. ATLS' D/E ratio of 186% is on the high side. Companies with high D/E ratios may have difficulty attracting additional investment capital. 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.
After a decline of 1.5%, PNM Resources (NYSE:PNM) has hit a share price of $20.35. So far today, the company's volume is 140,486 shares, 0.3 times the average daily volume. Volume indicates the level of interest that investors have in a company at its current price. Looking at a company's valuation ratios is a good way of getting a basic idea as to its value as an investment. The capitalization ratio is calculated by dividing long-term debt by the sum of long-term debt and shareholders' equity. PNM's capitalization ratio of 50.9% is relatively high. A company considered too highly leveraged (too much debt) may find its freedom of action restricted by its creditors and/or have its profitability hurt by high interest costs. Prudent use of leverage (debt) increases the financial resources available to a company for growth and expansion.
At $51.99, Pinnacle (NYSE:PNW) has slipped 1.4%. So far today, the company's volume is 510,213 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. Understanding investment valuation ratios allows an investor to assess the true value of an individual stock. The easy-to-calculate debt ratio is helpful to investors looking for a quick take on the leverage for a company. PNW's debt ratio of 71.4% is fairly high. This means that most of the company's assets are financed through debt. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.
Brookfield Infrastructure Partners (NYSE:BIP) has increased to a share price of $34.95, a 1.3% rise. The company's volume is currently 39,601 shares for the day, while it was 325,186 shares yesterday. When a stock price moves up or down, watching the volume is a good way of identifying how significant that shift is. Valuation ratios allow the investor to make a quick determination as to a company's investment value. One of the favorite tools of many value investors is analyzing price/book value ratios, as it provides a measure of the underlying value of a company's assets as compared to the valuation of its equity. BIP's P/B ratio of 1.14 shows that its share price is higher than its book value. This implies that investors expect management to create more value from a given set of assets and/or that the market value of the firm's assets is significantly higher than their accounting value. 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: How Buybacks Warps The Price-To-Book Ratio
The Bottom Line No matter the economic climate, Wall Street will always have stocks that make major moves each week. 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 biggest movers in the Utilities sector (XLU) (+0.2%) are:
| Company | Market Cap | Percentage Change |
| Companhia Energetica Minas Gerais (NYSE:CIG) | $11.45 billion | +3.5% |
| Companhia de Saneamento Basico (NYSE:SBS) | $8.59 billion | +2.8% |
| Companhia Paranaense de Energia (NYSE:ELP) | $4.43 billion | +2.5% |
| Atlas (NYSE:ATLS) | $1.82 billion | -1.9% |
| PNM Resources (NYSE:PNM) | $1.64 billion | -1.5% |
| Pinnacle (NYSE:PNW) | $5.78 billion | -1.4% |
| Brookfield Infrastructure Partners (NYSE:BIP) | $4.95 billion | +1.3% |
Companhia Energetica Minas Gerais (NYSE:CIG) is at $13.89 per share after an increase of 3.5%. The company's volume is currently 1.8 million shares for the day, 0.2 times the average daily volume. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. 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. If the price/book value ratio of a stock is high, it may indicate that the stock is expensive, while a lower ratio may indicate that the stock is a bargain. CIG's stock is trading for more than its book value with a P/B ratio of 1.85. 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 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: Investment Valuation Ratios: Price/Book Value Ratio
Companhia de Saneamento Basico (NYSE:SBS) has risen 2.8% and is currently trading at $77.59 per share. The company is currently trading a volume of 166,451 shares. A stock's volume conveys how excited investors are about it. 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. Dividend yield is a way to measure how much cash flow you are getting for each dollar invested in an equity position - in other words, how much "bang for your buck" you are getting from dividends. SBS has a dividend yield of 2.7%. Just as with the yield on a bond or certificate of deposit, the higher the dividend yield, the higher the return to the investor. SEE: Due Diligence On Dividends
After rising 2.5%, Companhia Paranaense de Energia (NYSE:ELP) is currently trading at a share price of $16.58. So far today, 147,139 shares have changed hands, which is likely to result in less activity than yesterday's volume of 574,201 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. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual 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 ELP is a high 1.38. In young companies, a high P/S ratio is a sign of sales growth that is expected to turn into earnings and cash flow. 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.
After a decline of 1.5%, PNM Resources (NYSE:PNM) has hit a share price of $20.35. So far today, the company's volume is 140,486 shares, 0.3 times the average daily volume. Volume indicates the level of interest that investors have in a company at its current price. Looking at a company's valuation ratios is a good way of getting a basic idea as to its value as an investment. The capitalization ratio is calculated by dividing long-term debt by the sum of long-term debt and shareholders' equity. PNM's capitalization ratio of 50.9% is relatively high. A company considered too highly leveraged (too much debt) may find its freedom of action restricted by its creditors and/or have its profitability hurt by high interest costs. Prudent use of leverage (debt) increases the financial resources available to a company for growth and expansion.
At $51.99, Pinnacle (NYSE:PNW) has slipped 1.4%. So far today, the company's volume is 510,213 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. Understanding investment valuation ratios allows an investor to assess the true value of an individual stock. The easy-to-calculate debt ratio is helpful to investors looking for a quick take on the leverage for a company. PNW's debt ratio of 71.4% is fairly high. This means that most of the company's assets are financed through debt. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.
Brookfield Infrastructure Partners (NYSE:BIP) has increased to a share price of $34.95, a 1.3% rise. The company's volume is currently 39,601 shares for the day, while it was 325,186 shares yesterday. When a stock price moves up or down, watching the volume is a good way of identifying how significant that shift is. Valuation ratios allow the investor to make a quick determination as to a company's investment value. One of the favorite tools of many value investors is analyzing price/book value ratios, as it provides a measure of the underlying value of a company's assets as compared to the valuation of its equity. BIP's P/B ratio of 1.14 shows that its share price is higher than its book value. This implies that investors expect management to create more value from a given set of assets and/or that the market value of the firm's assets is significantly higher than their accounting value. 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: How Buybacks Warps The Price-To-Book Ratio
The Bottom Line No matter the economic climate, Wall Street will always have stocks that make major moves each week. 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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