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Tickers in this Article: ROSE, PXD, LUFK, CEO, IOC, CXO, OIS
On a good day for the market, the Nasdaq has risen 1.1%, the S&P 500 has moved up 0.6% and the Dow is trading up 0.4%. 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) is up 1.9%, outperforming the market overall. The biggest movers in the sector so far are:
CompanyMarket CapPercentage Change
Rosetta Resources (Nasdaq:ROSE)$2.48 billion+5.8%
Pioneer Natural Res (NYSE:PXD)$13.45 billion+5.3%
Lufkin Industries (Nasdaq:LUFK)$1.95 billion+4.8%
CNOOC Limited (NYSE:CEO)$87.89 billion+4%
InterOil Corporation (NYSE:IOC)$4.08 billion+3.9%
Concho Resources (NYSE:CXO)$10.15 billion+3.6%
Oil States International (NYSE:OIS)$4.62 billion+3.3%
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Rosetta Resources (Nasdaq:ROSE) has increased to a share price of $49.69, a 5.8% rise. The company's volume is currently 257,972 shares for the day, in line with the current daily average. A stock's volume conveys how excited investors are about it. Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. The easy-to-calculate debt ratio is helpful to investors looking for a quick take on the leverage for a company. ROSE has a debt ratio of 39.9%, which is fairly low. In other words, the company is less sensitive to changes in business or interest rates since less of its cash flow is dedicated to paying off loan expenses. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.

Pioneer Natural Res (NYSE:PXD) is up 5.3% to reach a current price of $115.10 per share. The company is currently trading a volume of 1.6 million shares. 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/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 PXD is a high 3.63. 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 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.

Rising 4.8%, Lufkin Industries (Nasdaq:LUFK) is currently trading at $60.75 per share. The company's volume for the day so far is 270,455 shares, consistent with its average over the last three months. High volume indicates a lot of investor interest while low volume indicates the opposite. 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. A company's capitalization (not to be confused with its market capitalization) is the term used to describe the makeup of a company's permanent or long-term capital, which consists of both long-term debt and shareholders' equity. The capitalizion ratio of 29.3% is on the low end. A very low capitalization ratio might be a sign that the company is stagnating and reducing the potential earnings for shareholders. A low level of debt and a healthy proportion of equity in a company's capital structure is an indication of financial fitness.

CNOOC Limited (NYSE:CEO) is currently trading at $204.66 per share, a 4% increase. The company's volume is currently 127,985 shares. This is greater than yesterday's volume of 112,105 shares. In technical analysis, trading volume is used to determine the strength of a market indicator. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. The debt-equity (D/E) ratio is a leverage ratio. CEO's debt-equity ratio of 19% is on the low end. A low D/E ratio may be a sign that the company is not taking advantage of leverage to increase its profits. The D/E ratio percentage provides a much more dramatic perspective on a company's leverage position than the debt ratio percentage.

InterOil Corporation (NYSE:IOC) has risen 3.9% and is currently trading at $87.76 per share. At 1.8 million shares, the company's volume so far today is 2.6 times the average daily volume. Volume is used to evaluate how meaningful the price movement of a stock is. 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 price/book value ratio is one of the more common methods of determining whether a stock is fairly valued. IOC has a P/B ratio of 11.97 which shows that its share price is higher than its book value. It is important to take the company's debt into account when using the P/B ratio as debt can boost a company's liabilities to the point where they wipe out much of the book value of its hard assets, creating artificially high P/B values. 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

Concho Resources (NYSE:CXO) has moved up 3.6% and is currently trading at $100.75 per share. So far today, 603,294 shares have changed hands. 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. Price/earnings ratios (P/E ratios) provide a measure of the relative value of a stock. CXO's P/E ratio of 15.5 is under the industry average of 20.88. A low P/E might arise due to substantial inherent risk of the firm and its operations, poor return on equity, or improper valuation of the market. High P/E stocks could be "growth" stocks, while low PE stocks may be "value" stocks. SEE: How To Find P/E And PEG Ratios

Oil States International (NYSE:OIS) is at $87.22 per share after an increase of 3.3%. At 293,881 shares, the company's volume so far today is 0.7 times the average volume over the last three months. 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. Investment valuation ratios can be very useful in estimating whether a stock price is too high, reasonable or a bargain investment opportunity. The debt ratio measures the leverage of a company, and a company's leverage is a good way to assess risk. The debt ratio for OIS is a low 44.5%. 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.

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. 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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