The market is doing well so far today. The Nasdaq is up 0.8%; the S&P 500 has moved up 0.7%; and the Dow has climbed 0.6%.
Despite a good day for the overall market so far, the Consumer/Non-Cyclical sector (XLP) is down 0.4% and its current biggest movers are:
|Company||Market Cap||Percentage Change|
|Church & Dwight Co., Inc. (NYSE:CHD)||$7.74 billion||-8.3%|
|Nu Skin Enterprises, Inc. (NYSE:NUS)||$3.08 billion||-6.9%|
|Green Mountain Coffee Roasters Inc. (Nasdaq:GMCR)||$3.34 billion||+4.7%|
|Starbucks (Nasdaq:SBUX)||$33.04 billion||+3.5%|
|Annies Inc (NYSE:BNNY)||$715.8 million||-3.2%|
|Deluxe Corporation (NYSE:DLX)||$1.43 billion||+3%|
|USANA Health Sciences, Inc. (NYSE:USNA)||$691.8 million||-2.8%|
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Church & Dwight Co (NYSE:CHD) is down 8.3% to reach $51.05 per share. The company's volume is currently 2.2 million shares for the day, whereas yesterday, volume was only 1.2 million shares. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. 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/earnings ratio is calculated by taking a stock price and dividing it by the earnings-per-share (EPS). Compared to the industry average of 17.07, CHD's P/E ratio of 25.2 is quite high. Usually, if a stock has a high P/E ratio, it indicates that the market expects the company to grow earnings quickly in the future. A high P/E ratio indicates a stock that is expensive, while a low P/E ratio indicates a stock that is cheap. SEE: How To Find P/E And PEG Ratios
Nu Skin Enterprises (NYSE:NUS) is trading at $45.47 per share, down 6.9%. The company is currently trading a volume of 6.3 million shares. Volume is an important indicator because it indicates how significant a price shift is. 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. 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. NUS has a low capitalization ratio of 25.2%. A low capitalization ratio can signify a failure to leverage equity into investment, missing valuable opportunities for growth and expansion. A low level of debt and a healthy proportion of equity in a company's capital structure is an indication of financial fitness.
Increasing 4.7%, Green Mountain Coffee Roasters (Nasdaq:GMCR) is trading at $22.47 per share. With 3.4 million shares changing hands so far today, the company's volume is 0.3 times the 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. A company's value as an investment is more easily 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/earnings to growth (PEG) ratio can reveal value what price/earnings (P/E) ratios alone may not so that if a company has a high P/E ratio (an indication that its stock is overpriced) but its earnings are growing very quickly, the PEG ratio may reveal that the company is actually fairly valued, or perhaps even a bargain. GMCR has a PEG ratio of 0.44, which is consistent 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.
After an increase of 3.5%, Starbucks (Nasdaq:SBUX) has reached a current price of $45. This morning, the company's volume is 5.9 million shares. This is in keeping with its current daily average. When a stock price moves up or down, watching the volume is a good way of identifying how significant that shift is. Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. The price/book value ratio, often expressed simply as "price-to-book", provides investors a way to compare the market value, or what they are paying for each share, to a conservative measure of the value of the firm. SBUX's P/B ratio of 6.35 shows that its share price is higher than its book value. This may be a sign that the company is overvalued. A weakness of the P/B value ratio is that while the price component is easily determined by looking at the stock quote, the book value component is more difficult to estimate and more open to individual interpretation and analysis. SEE: How Buybacks Warps The Price-To-Book Ratio
Slipping 3.2%, Annies (NYSE:BNNY) is currently trading at $40.60 per share. So far today, the company's volume is 124,586 shares, above yesterday's volume of 95,742 shares. In technical analysis, trading volume is used to determine the strength of a market indicator. Valuation ratios allow the investor to make a quick determination as to a company's investment value. The debt ratio shows the proportion of assets that a company is financing through debt. The debt ratio for BNNY is a low 8.6%. This indicates that the company engages in conservative financing with opportunities to borrow in the future at no significant risk. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.
Deluxe (NYSE:DLX) is up 3% to reach a current price of $28.81 per share. So far today, 101,226 shares have changed hands. 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 debt-equity (D/E) ratio is a leverage ratio. DLX's D/E ratio of 207% is on the high side. This shows that the company's assets are financed primarily through debt. The D/E ratio is not a pure measurement of a company's debt because it includes operational liabilities in total liabilities.
At $45.25, USANA Health Sciences (NYSE:USNA) has slipped 2.8%. The company's volume for the day so far is 137,887 shares, 0.7 times its current three-month average. High volume indicates a lot of investor interest while low volume indicates the opposite. 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. A company's price/earnings ratio (P/E ratio) provides a measure of how expensive or cheap a stock is. The P/E ratio for USNA is 12.6, above the industry average of 0.79. This could mean that the market is expecting big things over the next few months or years. To determine the P/E ratio, an investor divides the market price of the stock by the earnings-per-share (EPS) of the stock. SEE: Profit With The Power Of Price-To-Earnings
The Bottom Line On any given day, a particular stock may see positive or negative change in its share price. Paying close attention to the previous ratios will help you identify key times to adjust your strategy. 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.