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Tickers in this Article: KEP, ORA, EXLP, HNP, ENB, NWE, OKS
The Nasdaq has fallen 0.8%, the S&P 500 is down 0.5% and the Dow has decreased 0.7%, marking a bad morning for the market. The utilities sector is a category of stocks for utilities such as gas and power. It contains companies such as electric, gas and water firms and integrated providers. Because utilities require significant infrastructure, these firms often carry large amounts of debt. With a high debt load, utilities companies become sensitive to changes in the interest rate. As interest rates rise or drop, the debt payments will increase or decrease. The utilities sector performs best when interest rates are falling or remain low.

The Utilities sector (XLU) is relatively unchanged on a bad day for the market overall. The current biggest movers in the sector are:
CompanyMarket CapPercentage Change
Korea Electric Power Corporation (NYSE:KEP)$13.74 billion-2.4%
Ormat Technologies (NYSE:ORA)$862.7 million-2.1%
Exterran Partners (Nasdaq:EXLP)$900.2 million+1.7%
Huaneng Power International, Inc (NYSE:HNP)$9.72 billion-1.6%
Enbridge Inc (NYSE:ENB)$31.43 billion-1.4%
NorthWestern (NYSE:NWE)$1.36 billion-1.2%
Oneok (NYSE:OKS)$12.49 billion-1.1%
Forex Broker Summary: Forex Capital Markets (FXCM)

Korea Electric Power Corporation (NYSE:KEP) has decreased to $10.45 per share, a 2.4% fall. The company's volume is currently 78,891 shares for the day, 0.2 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. Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. 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. KEP has a P/B ratio of 0.3, which shows that its book value is higher than its share price. Industries that require more infrastructure capital (for each dollar of profit) will usually trade at P/B ratios much lower than those that don't. 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

Slipping 2.1%, Ormat Technologies (NYSE:ORA) is currently trading at $18.60 per share. This morning, the company is trading a volume of 25,940 shares. A stock's volume conveys how excited investors are about it. Valuation ratios allow the investor to make a quick determination as to a company's investment value. The dividend yield is calculated by dividing a company's dividends per share by its stock price. ORA has a low dividend yield of 0.8%. If you are an income investor, this stock may not be attractive to you. It is important to remember that while a higher dividend yield is more attractive, all else being equal, a higher dividend yield can also indicate greater perceived risk. SEE: Guide To Stock-Picking Strategies: Income Investing

Exterran Partners (Nasdaq:EXLP) is currently trading at $21.67 per share, a 1.7% increase. The company's volume is currently 50,932 shares for the day, 0.6 times the average volume over the last three months. If a stock price makes a big move up or down, volume lets us know the significance of that 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 debt ratio shows the proportion of assets that a company is financing through debt. The debt ratio for EXLP is 59%. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.

Huaneng Power International, Inc (NYSE:HNP) is down 1.6% to reach $27.23 per share. So far today, the company's volume is 25,028 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 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/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. HNP's P/S ratio of 0.48 is fairly low. A company with a lower P/S ratio is generally considered more attractive, since investors are paying less for each dollar of sales. All things being equal, a low P/S ratio is good news for investors, while a very high one can be a warning sign.

Enbridge Inc (NYSE:ENB) is down 1.4% to reach $38.88 per share. The company's volume is currently 208,896 shares for the day, consistent with its current daily average. If a stock price moves on high volume, this means that the change is a significant one. Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. The capitalization ratio is calculated by dividing long-term debt by the sum of long-term debt and shareholders' equity. ENB has a high capitalization ratio of 66.2%. A company considered too highly leveraged (too much debt) may find its freedom of action restricted by its creditors and/or have its profitability hurt by high interest costs. 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.

NorthWestern (NYSE:NWE) has fallen 1.2% and is currently trading at $36.15 per share. The company's volume for the day so far is 124,266 shares. If a stock price moves on high volume, this means that the change is a significant one. 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 P/E ratio has been used for ages by analysts and still remains one of the most relevant pieces of stock valuation. The P/E ratio for NWE is 14.5, above the industry average of 10.21. Usually, if a stock has a high P/E ratio, it indicates that the market expects the company to grow earnings quickly in the future. High P/E stocks could be "growth" stocks, while low PE stocks may be "value" stocks. SEE: How To Use The P/E Ratio And PEG To Tell The Future Of A Stock

After a decline of 1.1%, Oneok (NYSE:OKS) has hit a share price of $56.17. So far today, the company's volume is 77,035 shares, 0.4 times the current three-month average. Volume indicates the level of interest that investors have in a company at its current price. 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 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). OKS' PEG ratio is -2.75. 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. 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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