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Continental Resources and More Big Movers in Oil and Gas Operations on September 24, 2012
The morning has been bad for the market. The Nasdaq is trading down 0.7%; the S&P 500 has fallen 0.2%; and the Dow has slipped 0.2%.
The Oil and Gas Operations sector (DIG) is down 0.8%, underperforming the market overall. The current biggest movers in the sector are:
Forex Broker Summary: Forex Capital Markets (FXCM)
Cobalt International Energy (NYSE:CIE) has fallen 7% and is currently trading at $22.98 per share. So far today, the company's volume is two million shares, 1.2 times the average daily volume. If a stock price makes a big move up or down, volume lets us know the significance of that move. Understanding investment valuation ratios allows an investor to assess the true value of an individual 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. CIE's stock is trading for more than its book value with a P/B ratio of 3.93. 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. Users need to be careful when applying this ratio though, as it is more useful for industrial companies that have a lot of tangible assets than it is for technology or consumer product companies that may not have much in the way of hard assets. SEE: How Buybacks Warps The Price-To-Book Ratio
After rising 5.4%, Quicksilver Resources (NYSE:KWK) is currently trading at a share price of $4.33. The company's volume is currently 1.6 million shares. This is about the same trading activity as there was yesterday. In technical analysis, trading volume is used to determine the strength of a market indicator. 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 debt ratio gives users a quick measure of the amount of debt that the company has on its balance sheets compared to its assets. KWK has a high debt ratio of 82.2%. As such, the company is highly leveraged and not highly liquid. However, one thing to note with this ratio: it isn't a pure measure of a company's debt (or indebtedness), as it also includes operational liabilities, such as accounts payable and taxes payable.
Chesapeake Midstream Partners (NYSE:ACMP) has increased to a share price of $32.70, a 3.3% rise. So far today, the company's volume is 126,372 shares, 0.4 times its current three-month average. Volume indicates the level of interest that investors have in a company at its current price. 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). ACMP's P/E ratio of 21.4 is under the industry average of 24.9. A low P/E might arise due to substantial inherent risk of the firm and its operations, poor return on equity, or improper valuation of the market. High P/E stocks could be "growth" stocks, while low PE stocks may be "value" stocks. SEE: The P/E Ratio: A Good Market-Timing Indicator
Currently trading at $43.90 per share, Cabot Oil & Gas (NYSE:COG) has fallen 2.6%. The company is currently trading a volume of 841,832 shares. If a stock price moves on high volume, this means that the change is a significant one. 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 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. COG has a capitalization ratio of 31.3%. Prudent use of leverage (debt) increases the financial resources available to a company for growth and expansion.
EV Energy Partners (Nasdaq:EVEP) has decreased to $60.58 per share, a 2.5% fall. So far today, the company's volume is 199,397 shares, 0.9 times the average daily volume. 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. Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. 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. Dividend yield for EVEP is 4.9%. It is important to remember that dividends are only one component of a stock's return and capital appreciation (or decline) must also be considered when evaluating a security. SEE: Dividend Yield For The Downturn
Slipping 2.4%, Whiting (NYSE:WLL) is currently trading at $47.98 per share. The company is trading at a volume of 534,361 shares. This is on pace to fall short of yesterday's volume of 2.3 million shares. A stock's volume conveys how excited investors are about it. 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. 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. WLL's P/B ratio of 1.73 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. 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: Using The Price-To-Book Ratio To Evaluate Companies
Falling 2.2%, Continental Resources (NYSE:CLR) is currently at a share price of $78.58. The company's volume for the day so far is 208,794 shares, 0.3 times its average over the past three months. High volume indicates a lot of investor interest while low volume indicates the opposite. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. The assumption with high price/earnings stocks (generally of the growth variety) is that investors are willing to buy at a high price because they believe that the stock has significant growth potential, and the price/earnings to growth (PEG) ratio helps investors determine the degree of reliability of that growth assumption. CLR's PEG ratio is 0.74. 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.
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.
The Oil and Gas Operations sector (DIG) is down 0.8%, underperforming the market overall. The current biggest movers in the sector are:
| Company | Market Cap | Percentage Change |
| Cobalt International Energy (NYSE:CIE) | $10.15 billion | -7% |
| Quicksilver Resources (NYSE:KWK) | $710.9 million | +5.4% |
| Chesapeake Midstream Partners (NYSE:ACMP) | $4.69 billion | +3.3% |
| Cabot Oil & Gas (NYSE:COG) | $9.46 billion | -2.6% |
| EV Energy Partners (Nasdaq:EVEP) | $2.63 billion | -2.5% |
| Whiting (NYSE:WLL) | $5.78 billion | -2.4% |
| Continental Resources (NYSE:CLR) | $14.56 billion | -2.2% |
Cobalt International Energy (NYSE:CIE) has fallen 7% and is currently trading at $22.98 per share. So far today, the company's volume is two million shares, 1.2 times the average daily volume. If a stock price makes a big move up or down, volume lets us know the significance of that move. Understanding investment valuation ratios allows an investor to assess the true value of an individual 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. CIE's stock is trading for more than its book value with a P/B ratio of 3.93. 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. Users need to be careful when applying this ratio though, as it is more useful for industrial companies that have a lot of tangible assets than it is for technology or consumer product companies that may not have much in the way of hard assets. SEE: How Buybacks Warps The Price-To-Book Ratio
After rising 5.4%, Quicksilver Resources (NYSE:KWK) is currently trading at a share price of $4.33. The company's volume is currently 1.6 million shares. This is about the same trading activity as there was yesterday. In technical analysis, trading volume is used to determine the strength of a market indicator. 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 debt ratio gives users a quick measure of the amount of debt that the company has on its balance sheets compared to its assets. KWK has a high debt ratio of 82.2%. As such, the company is highly leveraged and not highly liquid. However, one thing to note with this ratio: it isn't a pure measure of a company's debt (or indebtedness), as it also includes operational liabilities, such as accounts payable and taxes payable.
Chesapeake Midstream Partners (NYSE:ACMP) has increased to a share price of $32.70, a 3.3% rise. So far today, the company's volume is 126,372 shares, 0.4 times its current three-month average. Volume indicates the level of interest that investors have in a company at its current price. 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). ACMP's P/E ratio of 21.4 is under the industry average of 24.9. A low P/E might arise due to substantial inherent risk of the firm and its operations, poor return on equity, or improper valuation of the market. High P/E stocks could be "growth" stocks, while low PE stocks may be "value" stocks. SEE: The P/E Ratio: A Good Market-Timing Indicator
EV Energy Partners (Nasdaq:EVEP) has decreased to $60.58 per share, a 2.5% fall. So far today, the company's volume is 199,397 shares, 0.9 times the average daily volume. 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. Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. 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. Dividend yield for EVEP is 4.9%. It is important to remember that dividends are only one component of a stock's return and capital appreciation (or decline) must also be considered when evaluating a security. SEE: Dividend Yield For The Downturn
Slipping 2.4%, Whiting (NYSE:WLL) is currently trading at $47.98 per share. The company is trading at a volume of 534,361 shares. This is on pace to fall short of yesterday's volume of 2.3 million shares. A stock's volume conveys how excited investors are about it. 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. 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. WLL's P/B ratio of 1.73 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. 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: Using The Price-To-Book Ratio To Evaluate Companies
Falling 2.2%, Continental Resources (NYSE:CLR) is currently at a share price of $78.58. The company's volume for the day so far is 208,794 shares, 0.3 times its average over the past three months. High volume indicates a lot of investor interest while low volume indicates the opposite. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. The assumption with high price/earnings stocks (generally of the growth variety) is that investors are willing to buy at a high price because they believe that the stock has significant growth potential, and the price/earnings to growth (PEG) ratio helps investors determine the degree of reliability of that growth assumption. CLR's PEG ratio is 0.74. 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.
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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