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Tickers in this Article: GMCR, POST, RDEN, HLF, K, ECL, BG
It's been a bad day for the market after the morning's trading. The Nasdaq has fallen 0.9%; the S&P 500 is down 0.7%; and the Dow has declined 0.7%.

The Consumer/Non-Cyclical sector (XLP) is currently ahead of the overall market, down only 0.2%, and its biggest movers are currently:
CompanyMarket CapPercentage Change
Green Mountain Coffee Roasters (Nasdaq:GMCR)$3.88 billion-4.4%
Post Holdings (NYSE:POST)$1.06 billion-2.9%
Elizabeth Arden (Nasdaq:RDEN)$1.38 billion-1.8%
Herbalife (NYSE:HLF)$5.57 billion-1.8%
Kellogg (NYSE:K)$18.39 billion-1.6%
Ecolab (NYSE:ECL)$19.05 billion-1.5%
Bunge (NYSE:BG)$9.4 billion-1.4%
Broker Summary: E-Trade Financial

Green Mountain Coffee Roasters (Nasdaq:GMCR) has fallen 4.4% and is currently trading at $23.86 per share. This morning, the company is trading a volume of 2.4 million shares. Volume is used to evaluate how meaningful the price movement of a stock is. Understanding investment valuation ratios allows an investor to assess the true value of an individual stock. 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. GMCR has a fairly low capitalization ratio of 15.3%. Investors generally consider a company with low debt and high equity levels is a good quality investment. This ratio is considered to be one of the more meaningful of the "debt" ratios - it delivers the key insight into the use of leverage by a company.

Post Holdings (NYSE:POST) is down 2.9% to reach $29.94 per share. At 41,946 shares, the company's volume so far today is in keeping with its current three-month average. 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 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. POST has a PEG ratio of 3.41, which is consistent 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.

Elizabeth Arden (Nasdaq:RDEN) is trading at $46.09 per share, down 1.8%. This morning, the company's volume is 15,802 shares. This is 0.2 times its current daily average. If a stock price makes a big move up or down, volume lets us know the significance of that move. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. 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. The P/B ratio for RDEN is 2.82, indicating that the stock is trading for more 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. 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

Currently trading at $48.90 per share, Herbalife (NYSE:HLF) has fallen 1.8%. At 258,847 shares, the company's volume so far today is which is likely to result in less activity than yesterday's volume of 802,330 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. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. Dividend yield measures the income that a stock will generate for an investor. HLF's dividend yield is 2.4%. To calculate the dividend yield, divide the level of dividends by the stock price; the higher the yield, the more attractive the security. SEE: Dividend Yield For The Downturn

Slipping 1.6%, Kellogg (NYSE:K) is currently trading at $50.60 per share. So far today, the company's volume is 579,603 shares. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. Valuation ratios allow the investor to make a quick determination as to a company's investment value. The price/earnings ratio is calculated by taking a stock price and dividing it by the earnings-per-share (EPS). K's P/E ratio of 15.6 falls below the industry average of 39.22. A low P/E ratio may indicate that the market expects relatively slower earnings growth. To determine the P/E ratio, an investor divides the market price of the stock by the earnings-per-share (EPS) of the stock. SEE: Profit With The Power Of Price-To-Earnings

Falling 1.5%, Ecolab (NYSE:ECL) is currently at a share price of $64.16. The company's volume is currently 414,677 shares for the day, 0.4 times its average over the past three months. When a stock price moves up or down, watching the volume is a good way of identifying how significant that shift is. 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 easy-to-calculate debt ratio is helpful to investors looking for a quick take on the leverage for a company. ECL has a high debt ratio of 65.9%. This might mean that the company now has low borrowing capacity, which reduces it's financial flexibility. 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.

Falling 1.4%, Bunge (NYSE:BG) is currently at a share price of $63.47. So far today, the company's volume is 185,158 shares. This is 0.2 times the current daily average. Volume is an important indicator because it indicates how significant a price shift is. Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. 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 BG is 0.15, which is relatively low. Low P/S ratios can indicate unrecognized value potential - so long as other criteria like high profit margins, low debt levels and growth prospects are in place. All things being equal, a low P/S ratio is good news for investors, while a very high one can be a warning sign.

The Bottom Line The nature of the market is such that stocks will have good days and bad days. Daily stock performance should be weighed against historical performance and put in context of the market overall. 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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