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Tickers in this Article: IO, ORIG, IOC, LPI, CLB, CWEI, GLP
The Nasdaq has climbed 0.2%, the S&P 500 remains relatively unchanged and the Dow has decreased 0.2% after the morning's trading. 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.

The Energy sector (XLE) is up 0.1% so far today and here are its biggest movers:
CompanyMarket CapPercentage Change
Ion (NYSE:IO)$1.21 billion-14.8%
Ocean Rig UDW (Nasdaq:ORIG)$2.05 billion+3.7%
InterOil Corporation (NYSE:IOC)$4.03 billion-3.4%
Laredo Petroleum Holdings (NYSE:LPI)$2.92 billion-2.8%
Core Laboratories (NYSE:CLB)$5.74 billion+2.3%
Clayton Williams Energy (Nasdaq:CWEI)$616.2 million-2.2%
Global (NYSE:GLP)$663.5 million+1.9%
Forex Broker Summary: Forex Capital Markets (FXCM)

After a precipitous drop of 14.8%, Ion (NYSE:IO) is now trading at a share price of $6.62. The company's volume is currently 2.1 million shares for the day, 1.8 times the 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. Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. A price/sales ratio is derived by dividing stock market price by company sales. The P/S ratio for IO is 2.09, which is relatively high. This could be a good sign if the share price increases. All things being equal, a low P/S ratio is good news for investors, while a very high one can be a warning sign.

After rising 3.7%, Ocean Rig UDW (Nasdaq:ORIG) is currently trading at a share price of $16.17. So far today, 246,963 shares have changed hands. Volume indicates the level of interest that investors have in a company at its current price. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. A company's price/earnings ratio (P/E ratio) provides a measure of how expensive or cheap a stock is. ORIG's P/E ratio of 22.9 is above the industry average of 6.98. This could mean that the market is expecting big things over the next few months or years. A high or low P/E ratio is not good or bad in and of itself, but a company trading with a high P/E ratio must continue to post strong financial performance or its stock price is likely to fall. SEE: Investment Valuation Ratios: Price/Earnings Ratio

InterOil Corporation (NYSE:IOC) is down 3.4% to reach $80.53 per share. With 313,228 shares changing hands so far today, the company's volume is consistent with its average over the last three months. Volume is used to evaluate how meaningful the price movement of a stock 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. The capitalization ratio is calculated by dividing long-term debt by the sum of long-term debt and shareholders' equity. IOC has a low capitalization ratio of 10.7%. Low leverage is a significant balance sheet strength, a sign of a less risky investment. Prudent use of leverage (debt) increases the financial resources available to a company for growth and expansion.

Laredo Petroleum Holdings (NYSE:LPI) is trading at $22.17 per share, down 2.8%. So far today, 30,895 shares of the company's stock have changed hands. This is on pace to fall short of yesterday's volume of 111,062 shares. Volume is an important indicator because it indicates how significant a price 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. The price/book value ratio is especially important for value investors as it can provide an indication of the true value of a company's assets at a time when its business model may be failing. The P/B ratio for LPI is 3.46, indicating that the stock is trading for more 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: How Buybacks Warps The Price-To-Book Ratio

Rising 2.3%, Core Laboratories (NYSE:CLB) is currently trading at $124.24 per share. The company's volume is currently 258,806 shares for the day, 0.9 times its current daily average. 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. 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 dividend yield is measured by taking the annual dividends per share and dividing that number by the stock price. CLB has a dividend yield of 0.9%, which is fairly low. A company with a low dividend yield may be a safer investment in the long run. To calculate the dividend yield, divide the level of dividends by the stock price; the higher the yield, the more attractive the security. SEE: Investment Valuation Ratios: Dividend Yield

After a decline of 2.2%, Clayton Williams Energy (Nasdaq:CWEI) has hit a share price of $49.55. So far today, the company's volume is 11,333 shares. The trading volume for a stock indicates the level of investor interest. 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/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. CWEI has a high P/S ratio of 1.4. In young companies, a high P/S ratio is a sign of sales growth that is expected to turn into earnings and cash flow. It is important to compare P/S ratios for companies in the same industry, as ratios can vary quite widely for companies in different industries.

Global (NYSE:GLP) is at $24.66 per share after an increase of 1.9%. At 20,260 shares, the company's volume so far today is in keeping with the average volume over the past three months. 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. Investment valuation ratios can be very useful in estimating whether a stock price is too high, reasonable or a bargain investment opportunity. 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. GLP has a PEG ratio of 2.49. 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 The nature of the market is such that stocks will have good days and bad days. It is important to weigh current activity against historical performance when making any investment decisions. Keep in mind that all these ratios should be compared against historical numbers and industry information in order to get a more complete picture.

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