The market is having a bad day so far. The Nasdaq has slipped 0.8%; the S&P 500 has fallen 0.6%; and the Dow is trading down 0.8%.

The Real Estate Operations sector (IYR) is currently ahead of the overall market, down only 0.2%, and its biggest movers are currently:


CompanyMarket CapPercentage Change
Zillow (Nasdaq:Z)$1.22 billion-2.2%
Kennedy-Wilson Holdings (NYSE:KW)$882.2 million-2%
Getty (NYSE:GTY)$598.1 million-1.6%
Marriott Vacations (NYSE:VAC)$1.1 billion-1.4%
Pennsylvania (NYSE:PEI)$880.5 million+1.2%
McGrath (Nasdaq:MGRC)$623.7 million-0.9%
DuPont Fabros Technology (NYSE:DFT)$1.74 billion-0.9%
Broker Summary: E-Trade Financial

Slipping 2.2%, Zillow (Nasdaq:Z) is currently trading at $40.67 per share. So far today, 301,529 shares of the company's stock have changed hands. This is about the same trading activity as there was yesterday. If a stock is trading on low volume, then there is not much interest in the stock. On the other hand, if a stock is trading on high volume, then there is a lot of interest in the stock. 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 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. Z has a PEG ratio of 14.86. 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.

Currently trading at $13.57 per share, Kennedy-Wilson Holdings (NYSE:KW) has fallen 2%. So far today, the company's volume is 14,956 shares, 0.2 times the average daily volume. 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. 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. KW's capitalization ratio is 41%. The capitalization ratio is one of the more meaningful debt ratios because it focuses on the relationship of debt liabilities as a component of a company's total capital base, which is the capital raised by shareholders and lenders.

Falling 1.6%, Getty (NYSE:GTY) is currently at a share price of $17.63. So far today, the company's volume is 24,312 shares. 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. Valuation ratios allow the investor to make a quick determination as to a company's investment value. If the price/book value ratio of a stock is high, it may indicate that the stock is expensive, while a lower ratio may indicate that the stock is a bargain. GTY has a P/B ratio of 1.56 which 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: How Buybacks Warps The Price-To-Book Ratio

After a decline of 1.4%, Marriott Vacations (NYSE:VAC) has hit a share price of $31.66. At 118,212 shares, the company's volume so far today is 0.6 times the current three-month average. High volume indicates a lot of investor interest while low volume indicates the opposite. 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 easy-to-calculate debt ratio is helpful to investors looking for a quick take on the leverage for a company. The debt ratio for VAC is 56.4%. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.

Rising 1.2%, Pennsylvania (NYSE:PEI) is currently trading at $15.91 per share. The company is trading at a volume of 102,423 shares. This is on pace to fall short of yesterday's volume of 335,778 shares. The trading volume for a stock indicates the level of investor 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-equity (D/E) ratio compares the total liabilities for a company to its total shareholder equity. PEI's D/E ratio of 329% is on the high side. Companies with high D/E ratios may have difficulty attracting additional investment capital. The D/E ratio percentage provides a much more dramatic perspective on a company's leverage position than the debt ratio percentage.

At $24.95, McGrath (Nasdaq:MGRC) has slipped 0.9%. So far today, the company's volume is 9,306 shares, 0.3 times its current daily average. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. 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 compares a company's P/E ratio to its earnings-per-share growth rate, which tells you whether or not you are getting a good value when purchasing a stock with a high price/earnings ratio (P/E ratio). MGRC has a PEG ratio of 1.16, which is consistent with the industry average. Because of the adjustment for earnings growth rate, the PEG ratio is somewhat more useful than many formulas for comparing companies in different industries.

DuPont Fabros Technology (NYSE:DFT) is trading at $27.32 per share, down 0.9%. The company is currently trading a volume of 259,870 shares. If a stock price moves on high volume, this means that the change is a significant one. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. Price/earnings ratios (P/E ratios) provide a measure of the relative value of a stock. DFT has a P/E ratio of 52.0, high compared to the industry average of 14.43. A company with a high P/E ratio will eventually have to live up to the high rating by substantially increasing its earnings, or the price will need to drop. 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: The P/E Ratio: A Good Market-Timing Indicator

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. 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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Tickers in this Article: Z, KW, GTY, VAC, PEI, MGRC, DFT

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