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Tickers in this Article: BPT, SXL, PXP, DVN, ESV, TDW, CXO
The Nasdaq has decreased 0.2%, the S&P 500 remains relatively unchanged and the Dow is unchanged so far today. 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) has fallen 0.6% despite little change in the market overall. The biggest movers in the sector so far are:
CompanyMarket CapPercentage Change
BP Prudhoe Bay (NYSE:BPT)$2 billion-9.3%
Sunoco Logistics Partners (NYSE:SXL)$4.63 billion+3.7%
Plains Exploration & Production (NYSE:PXP)$5.27 billion-2.4%
Devon Energy (NYSE:DVN)$24.39 billion-2.3%
ENSCO (NYSE:ESV)$13.25 billion-2.3%
Tidewater (NYSE:TDW)$2.42 billion-2.3%
Concho Resources (NYSE:CXO)$9.58 billion-2.2%
Broker Summary: OptionsXpress Online Trading Platform

BP Prudhoe Bay (NYSE:BPT) is down 9.3% to reach $84.77 per share. The company is currently trading a volume of 1.2 million shares. 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. 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. For investors primarily interested in the income a stock can generate, the dividend yield is an important determinant of how attractive a stock is. Dividend yield for BPT is a high 9.9%. This could mean either that the stock is underpriced or that the company has fallen on hard times and future dividends will not be as high as previous ones. To calculate the dividend yield, divide the level of dividends by the stock price; the higher the yield, the more attractive the security. SEE: Due Diligence On Dividends

Sunoco Logistics Partners (NYSE:SXL) has moved up 3.7% and is currently trading at $46.32 per share. The company's volume is currently 161,311 shares for the day, 0.9 times the current three-month average. In technical analysis, trading volume is used to determine the strength of a market indicator. 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. The price/earnings to growth (PEG) ratio divides a company's P/E ratio by its growth rate of earnings-per-share. SXL's PEG ratio of 2.11 is in line 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 a decline of 2.4%, Plains Exploration & Production (NYSE:PXP) has hit a share price of $39.90. The company's volume for the day so far is 342,009 shares. This is on pace to fall short of yesterday's volume of one million shares. If a stock price makes a big move up or down, volume lets us know the significance of that move. 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 price/book value ratio is one of the more common methods of determining whether a stock is fairly valued. PXP has a P/B ratio of 1.55 which shows that its share price is higher than its book value. This may be a sign that the company is overvalued. To put things in perspective, should be made among companies in the same industry rather than across industries. SEE: Using The Price-To-Book Ratio To Evaluate Companies

After a decline of 2.3%, Devon Energy (NYSE:DVN) has hit a share price of $58.91. So far today, the company's volume is two million shares, 0.7 times its current daily average. In technical analysis, trading volume is used to determine the strength of a market indicator. 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. A simple P/E ratio can reveal the stock's real market value and show how the valuation compares to its industry group or a benchmark like the S&P 500 Index. DVN's P/E ratio of 10.1 is under the industry average of 14.85. Companies with low P/E ratios may find it easier to surprise the market to the upside, even if their financial performance is not as strong as that of companies with high P/E ratios. A high P/E ratio indicates a stock that is expensive, while a low P/E ratio indicates a stock that is cheap. SEE: Understanding The P/E Ratio

At $56.14, ENSCO (NYSE:ESV) has slipped 2.3%. The company's volume for the day so far is 971,399 shares. 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. 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. ESV's P/S ratio of 2.72 is on the high side. This could be a good sign if the share price increases. 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.

Tidewater (NYSE:TDW) has decreased to $47.51 per share, a 2.3% fall. At 187,190 shares, the company's volume so far today is consistent with its average over the last 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. Looking at a company's valuation ratios is a good way of getting a basic idea as to its value as an investment. 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. TDW has a low debt ratio of 38.5%. 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.

Concho Resources (NYSE:CXO) has fallen 2.2% and is currently trading at $89.84 per share. So far today, the company's volume is 541,999 shares. If a stock price moves on high volume, this means that the change is a significant one. Valuation ratios allow the investor to make a quick determination as to a company's investment value. 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. CXO has a D/E ratio of 76%. The D/E ratio percentage provides a much more dramatic perspective on a company's leverage position than the debt ratio percentage.

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. 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.

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