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Financial Sector's Biggest Movers for June 26, 2012
The Nasdaq is up 0.2%, the S&P 500 is trading up 0.1% and the Dow is down 0.1% after the morning's trading. The financial sector is the category of stocks containing firms that provide financial services to commercial and retail customers. This sector includes banks, investment funds, insurance companies and real estate. Financial services perform best in low interest rate environments. A large portion of this sector generates revenue from mortgages and loans, which gain value as interest rates drop. Furthermore, when the business cycle is in an upswing, the financial sector benefits from additional investments. Improved economic conditions usually lead to more capital projects and increased personal investing. New projects require financing, which usually leads to a larger number of loans.
The Financial sector (XLF) has risen 0.2% so far today and here are its biggest movers:
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Moneygram International (NYSE:MGI) is trading at $14.52 per share, down 3.8%. The company is trading at a volume of 54,040 shares. Yesterday, 110,741 shares changed hands. 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. Profit-margin ratios help us to keep score, as measured over time, of management's ability to generate profits and manage costs and expenses. There are three key profit-margin ratios: gross profit margin, operating profit margin and net profit margin. MGI has a gross profit margin of 58.4%. Ideally, a company's profit margin should be stable or rising; declining profit margin should be cause for concern or further investigation. The company's net margin of 4.4% is high relative to its gross profit margin. This usually means that it also has one or more advantages over its competition. Operating profit measures how much cash the business throws off, and some consider it a more reliable measure of profitability since it is harder to manipulate with accounting tricks than net earnings. MGI's operating profit margin is 11.3%.
It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. The price/sales ratio measures a company's stock market price by its revenues. MGI's P/S ratio of 0.82 is fairly 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.
Increasing 3.3%, China Life Insurance Company Ltd (NYSE:LFC) is trading at $36.85 per share. The company's volume for the day so far is 184,024 share, 0.5 times its average over the past three months. If a stock price makes a big move up or down, volume lets us know the significance of that move. Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. The debt ratio measures the leverage of a company, and a company's leverage is a good way to assess risk. LFC has a debt ratio of 87.6%, which is on the high side. This means that the company's cash flow is significantly impacted by paying off principal and interest and that any negative change in performance or rise in interest rates could result in default. 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.
Currently trading at $21.69 per share, Green (NYSE:GDOT) has fallen 2.7%. So far today, 58,560 shares have changed hands. 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. A company's value as an investment is more easily 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. One of the most important estimates of stock market valuation is the price/earnings ratio (P/E ratio). GDOT's P/E ratio of 16.8 is consistent with the industry average. 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: Investment Valuation Ratios: Price/Earnings Ratio
Falling 2.3%, Encore Capital Group (Nasdaq:ECPG) is currently at a share price of $28.07. At 160,293 shares, the company's volume so far today is 0.7 times the current daily average. Volume is an important indicator because it indicates how significant a price shift is. Understanding investment valuation ratios allows the investor to assess the true value of an individual stock. 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. ECPG's P/B ratio of 1.8 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. P/B value comparisons should be made among companies in the same industry rather than across industries. SEE: Investment Valuation Ratios: Price/Book Value Ratio
At $26.12, iShares Silver Trust (NYSE:SLV) has slipped 2.2%. So far today, the company's volume is 4.1 million shares. This is below yesterday's volume of 11.6 million shares. When a stock price moves up or down, watching the volume is a good way of identifying how significant that shift is. Slipping 2%, Evercore Partners (NYSE:EVR) is currently trading at $21.98 per share. With 57,085 shares changing hands so far today, the company's volume is 0.1 times the current three-month average. A stock's volume conveys how excited investors are about it. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. In a nutshell, the price/sales ratio shows how much Wall Street values every dollar of the company's sales. The P/S ratio for EVR is a high 1.57. This could be a good sign if the share price increases. A limitation of the P/S ratio is that the price component measures only stock market captialization, while sales are a function of the entire capital structure, potentially leading to wide differences between levered and unlevered companies.
Credicorp Ltd (NYSE:BAP) is down 1.8% to reach $123.20 per share. The company's volume for the day so far is 154,201 shares. Volume is used to evaluate how meaningful the price movement of a stock is. 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 is calculated by dividing total liabilities by total assets. BAP has a high debt ratio of 89.8%. This might mean that the company now has low borrowing capacity, which reduces it's financial flexibility. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.
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. However, these fundamental metrics must be analyzed with historic data, industry information in addition to firm specific financial statements.
The Financial sector (XLF) has risen 0.2% so far today and here are its biggest movers:
| Company | Market Cap | Percentage Change |
| Moneygram International Inc (NYSE:MGI) | $873.3 million | -3.8% |
| China Life Insurance Company Ltd. (ADR) (NYSE:LFC) | $67.21 billion | +3.3% |
| Green Dot Corporation (NYSE:GDOT) | $793.3 million | -2.7% |
| Encore Capital Group, Inc. (Nasdaq:ECPG) | $709.8 million | -2.3% |
| iShares Silver Trust (ETF) (NYSE:SLV) | $8.74 billion | -2.2% |
| Evercore Partners Inc. (NYSE:EVR) | $651.8 million | -2% |
| Credicorp Ltd. (USA) (NYSE:BAP) | $10.01 billion | -1.8% |
Moneygram International (NYSE:MGI) is trading at $14.52 per share, down 3.8%. The company is trading at a volume of 54,040 shares. Yesterday, 110,741 shares changed hands. 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. Profit-margin ratios help us to keep score, as measured over time, of management's ability to generate profits and manage costs and expenses. There are three key profit-margin ratios: gross profit margin, operating profit margin and net profit margin. MGI has a gross profit margin of 58.4%. Ideally, a company's profit margin should be stable or rising; declining profit margin should be cause for concern or further investigation. The company's net margin of 4.4% is high relative to its gross profit margin. This usually means that it also has one or more advantages over its competition. Operating profit measures how much cash the business throws off, and some consider it a more reliable measure of profitability since it is harder to manipulate with accounting tricks than net earnings. MGI's operating profit margin is 11.3%.
It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. The price/sales ratio measures a company's stock market price by its revenues. MGI's P/S ratio of 0.82 is fairly 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.
Increasing 3.3%, China Life Insurance Company Ltd (NYSE:LFC) is trading at $36.85 per share. The company's volume for the day so far is 184,024 share, 0.5 times its average over the past three months. If a stock price makes a big move up or down, volume lets us know the significance of that move. Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. The debt ratio measures the leverage of a company, and a company's leverage is a good way to assess risk. LFC has a debt ratio of 87.6%, which is on the high side. This means that the company's cash flow is significantly impacted by paying off principal and interest and that any negative change in performance or rise in interest rates could result in default. 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.
Currently trading at $21.69 per share, Green (NYSE:GDOT) has fallen 2.7%. So far today, 58,560 shares have changed hands. 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. A company's value as an investment is more easily 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. One of the most important estimates of stock market valuation is the price/earnings ratio (P/E ratio). GDOT's P/E ratio of 16.8 is consistent with the industry average. 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: Investment Valuation Ratios: Price/Earnings Ratio
Falling 2.3%, Encore Capital Group (Nasdaq:ECPG) is currently at a share price of $28.07. At 160,293 shares, the company's volume so far today is 0.7 times the current daily average. Volume is an important indicator because it indicates how significant a price shift is. Understanding investment valuation ratios allows the investor to assess the true value of an individual stock. 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. ECPG's P/B ratio of 1.8 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. P/B value comparisons should be made among companies in the same industry rather than across industries. SEE: Investment Valuation Ratios: Price/Book Value Ratio
At $26.12, iShares Silver Trust (NYSE:SLV) has slipped 2.2%. So far today, the company's volume is 4.1 million shares. This is below yesterday's volume of 11.6 million shares. When a stock price moves up or down, watching the volume is a good way of identifying how significant that shift is. Slipping 2%, Evercore Partners (NYSE:EVR) is currently trading at $21.98 per share. With 57,085 shares changing hands so far today, the company's volume is 0.1 times the current three-month average. A stock's volume conveys how excited investors are about it. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. In a nutshell, the price/sales ratio shows how much Wall Street values every dollar of the company's sales. The P/S ratio for EVR is a high 1.57. This could be a good sign if the share price increases. A limitation of the P/S ratio is that the price component measures only stock market captialization, while sales are a function of the entire capital structure, potentially leading to wide differences between levered and unlevered companies.
Credicorp Ltd (NYSE:BAP) is down 1.8% to reach $123.20 per share. The company's volume for the day so far is 154,201 shares. Volume is used to evaluate how meaningful the price movement of a stock is. 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 is calculated by dividing total liabilities by total assets. BAP has a high debt ratio of 89.8%. This might mean that the company now has low borrowing capacity, which reduces it's financial flexibility. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.
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. However, these fundamental metrics must be analyzed with historic data, industry information in addition to firm specific financial statements.
by
Investopedia Staff
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