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Tickers in this Article: HMSY, SRPT, MAKO, OPTR, RDY, LPNT, OFIX
Currently, the Nasdaq has been relatively flat, the S&P 500 has risen 0.4% and the Dow has moved up 0.5%. The healthcare sector is the category of stocks relating to medical and healthcare goods or services. This sector includes hospital management firms, health maintenance organizations (HMOs), biotechnology and a variety of medical products. Stocks in the healthcare sector are often considered to be defensive because the products and services are essential. Even during economic downturns, people will still require medical aid and medicine to overcome illness. Having a consistent demand for goods and services makes this sector less sensitive to business cycle fluctuations.

The Healthcare sector (XLV) has increased 0.5% so far today and here are its biggest movers:
CompanyMarket CapPercentage Change
HMS (Nasdaq:HMSY)$2.78 billion-13.1%
Sarepta Therapeutics (Nasdaq:SRPT)$1.02 billion-10.1%
MAKO (Nasdaq:MAKO)$753.3 million-9.7%
Optimer Pharmaceuticals (Nasdaq:OPTR)$609.7 million-8.2%
Dr. Reddy\'s Laboratories Limited (NYSE:RDY)$5.47 billion+3.3%
LifePoint Hospitals (Nasdaq:LPNT)$2.12 billion-3.2%
Orthofix (Nasdaq:OFIX)$849.4 million-3.1%
Forex Broker Summary: Forex Capital Markets (FXCM)

Taking a 13.1% hit, HMS (Nasdaq:HMSY) is currently trading at $28.00 per share. The company's volume is currently 4.3 million shares for the day, 5.9 times the current daily average. A stock's volume conveys how excited investors are about it. 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. A price/sales ratio is derived by dividing stock market price by company sales. The P/S ratio for HMSY is 6.83, which is relatively high. 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.

Shares of Sarepta Therapeutics (Nasdaq:SRPT) are currently trading at $40.38, a steep decline of 10.1%. The company is currently trading a volume of five million shares. Volume is an important indicator because it indicates how significant a price shift is. 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 debt ratio is calculated by dividing total liabilities by total assets. SRPT has a debt ratio of 46.6%, which is fairly low. This indicates that the company engages in conservative financing with opportunities to borrow in the future at no significant risk. 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.

MAKO (Nasdaq:MAKO) is currently trading at a share price of $15.94, a 9.7% decline. So far today, the company's volume is 1.7 million shares, 1.9 times its average over the past three months. High volume indicates a lot of investor interest while low volume indicates the opposite. Valuation ratios allow the investor to make a quick determination as to a company's investment value. 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. MAKO has a P/B ratio of 7.31 which 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. 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

Currently trading at $11.77 per share, Optimer Pharmaceuticals (Nasdaq:OPTR) has fallen 8.2%. So far today, the company's volume is 629,618 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. Looking at a company's valuation ratios is a good way of getting a basic idea as to its value as an investment. The price/sales ratio is used for spotting recovery situations or for double-checking that a company's growth has not become overvalued. The P/S ratio for OPTR is a high 5.26. This could be a good sign if the share price increases. It is important to keep in mind when looking at the P/S ratio that just because a company is generating revenues, this does not mean that the company is profitable, and in the long run, profits drive stock prices.

Increasing 3.3%, Dr. Reddy's Laboratories Limited (NYSE:RDY) is trading at $33.27 per share. So far today, the company's volume is 94,782 shares, 0.4 times the average daily volume. 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 can be very useful in determining the value of a stock, but it is very important to keep in mind that while some financial ratios have general rules (or a broad application), in most instances it is a prudent practice to look at a company's historical performance and use peer company/industry comparisons to put any given company's ratio in perspective. The dividend yield is measured by taking the annual dividends per share and dividing that number by the stock price. RDY's dividend yield of 0.7% is fairly low. This may indicate that the company's stock is overpriced. A stock's dividend yield depends on the nature of a company's business, its posture in the marketplace (value or growth oriented), its earnings and cash flow, and its dividend policy. SEE: Dividend Yield For The Downturn

Falling 3.2%, LifePoint Hospitals (Nasdaq:LPNT) is currently at a share price of $42. So far today, 142,053 shares have changed hands. Volume indicates the level of interest that investors have in a company at its current price. 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 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. PEG ratio for LPNT is consistent with the industry average at 1.29. 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.

Orthofix (Nasdaq:OFIX) is trading at $43.40 per share, down 3.1%. With 33,023 shares changing hands so far today, the company's volume is consistent with its current three-month average. 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. 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. OFIX's P/B ratio of 2.32 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. 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

The Bottom Line On any given day, a particular stock may see positive or negative change in its share price. Daily stock performance should be weighed against historical performance and put in context of the market overall. However, these fundamental metrics must be analyzed with historic data, industry information in addition to firm specific financial statements.

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