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Financial Sector's Biggest Movers: Westpac Banking Corporation (ADR) and More
On a good day for the market, the Nasdaq has moved up 2.2%, the S&P 500 has climbed 2% and the Dow is up 1.8%. 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) is up 2.6%, outperforming the market overall. The biggest movers in the sector so far are:
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Health Net (NYSE:HNT) is at a share price of $18.84 after a sharp decline of 17%. So far today, the company's volume is seven million shares. 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. To a large degree, the debt-equity (D/E) ratio provides another vantage point on a company's leverage position, in this case, comparing total liabilities to shareholders' equity, as opposed to total assets in the debt ratio. HNT has a debt-equity ratio of 36%, which is on the low side. This shows that the company's assets are financed primarily through equity. The D/E ratio percentage provides a much more dramatic perspective on a company's leverage position than the debt ratio percentage.
Currently trading at $66.97 per share, Erie Indemnity (Nasdaq:ERIE) has fallen 4.9%. So far today, the company's volume is 10,169 shares, consistent with its average over the last three months. 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. Looking at a company's valuation ratios is a good way of getting a basic idea as to its value as an investment. When used consistently and uniformly, the price/earnings to growth (PEG) ratio is an essential tool that adds dimension to the price/earnings ratio, allows comparisons across diverse industries and is always on the lookout for value. ERIE's PEG ratio of 2.37 is in line 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.
Kayne Anderson MLP (NYSE:KYN) is currently trading at a share price of $29.73, a 4.7% decline. The company's volume for the day so far is 2.2 million shares. Yesterday, volume was only 137,774 shares. When a stock price moves up or down, watching the volume is a good way of identifying how significant that shift is. 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. Dividend yield is a way to measure how much cash flow you are getting for each dollar invested in an equity position - in other words, how much "bang for your buck" you are getting from dividends. KYN has a dividend yield of 6.8%. A stock's dividend yield depends on the nature of a company's business, its posture in the marketplace (value or growth oriented), its earnings and cash flow, and its dividend policy. SEE: Dividend Yield For The Downturn
Enstar (Nasdaq:ESGR) has increased to a share price of $94.65, a 3.5% rise. The company's volume is currently 2,656 shares for the day, 0.1 times the average daily volume. Volume indicates the level of interest that investors have in a company at its current price. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. A company's price/earnings ratio (P/E ratio) provides a measure of how expensive or cheap a stock is. ESGR is in line with the industry average with a P/E ratio of 8.2. 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: The P/E Ratio: A Good Market-Timing Indicator
Franklin (NYSE:BEN) has moved up 2.8% and is currently trading at $114.05 per share. The company is currently trading a volume of 178,426 shares. In technical analysis, trading volume is used to determine the strength of a market indicator. 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. BEN has a debt ratio of 35.8%, 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.
BlackRock (NYSE:BLK) is up 2.8% to reach a current price of $173.15 per share. With 209,835 shares changing hands so far today, the company's volume is 0.3 times the average volume over the last three months. The trading volume for a stock indicates the level of investor interest. Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. The price/sales ratio measures a company's stock market price by its revenues. The P/S ratio for BLK is 3.4, which is relatively high. 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.
Westpac Banking Corporation (NYSE:WBK) has risen 2.6% to hit a current price of $124.98 per share. So far today, the company's volume is 35,612 shares. This is greater than yesterday's volume of 30,628 shares. If a stock price moves on high volume, this means that the change is a significant one. 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 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. The capitalization ratio for WBK is 79.4%, which is fairly high. The company may have trouble meeting operating and debt liabilities on time and surviving adverse economic conditions. 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.
The Bottom Line No matter the economic climate, Wall Street will always have stocks that make major moves each week. 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) is up 2.6%, outperforming the market overall. The biggest movers in the sector so far are:
| Company | Market Cap | Percentage Change |
| Health Net, Inc. (NYSE:HNT) | $1.89 billion | -17% |
| Erie Indemnity Company (Nasdaq:ERIE) | $3.35 billion | -4.9% |
| Kayne Anderson MLP Investment Co. (NYSE:KYN) | $2.61 billion | -4.7% |
| Enstar Group Ltd. (Nasdaq:ESGR) | $1.52 billion | +3.5% |
| Franklin Resources (NYSE:BEN) | $23.59 billion | +2.8% |
| BlackRock (NYSE:BLK) | $30.26 billion | +2.8% |
| Westpac Banking Corporation (ADR) (NYSE:WBK) | $73.82 billion | +2.6% |
Health Net (NYSE:HNT) is at a share price of $18.84 after a sharp decline of 17%. So far today, the company's volume is seven million shares. 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. To a large degree, the debt-equity (D/E) ratio provides another vantage point on a company's leverage position, in this case, comparing total liabilities to shareholders' equity, as opposed to total assets in the debt ratio. HNT has a debt-equity ratio of 36%, which is on the low side. This shows that the company's assets are financed primarily through equity. The D/E ratio percentage provides a much more dramatic perspective on a company's leverage position than the debt ratio percentage.
Currently trading at $66.97 per share, Erie Indemnity (Nasdaq:ERIE) has fallen 4.9%. So far today, the company's volume is 10,169 shares, consistent with its average over the last three months. 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. Looking at a company's valuation ratios is a good way of getting a basic idea as to its value as an investment. When used consistently and uniformly, the price/earnings to growth (PEG) ratio is an essential tool that adds dimension to the price/earnings ratio, allows comparisons across diverse industries and is always on the lookout for value. ERIE's PEG ratio of 2.37 is in line 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.
Kayne Anderson MLP (NYSE:KYN) is currently trading at a share price of $29.73, a 4.7% decline. The company's volume for the day so far is 2.2 million shares. Yesterday, volume was only 137,774 shares. When a stock price moves up or down, watching the volume is a good way of identifying how significant that shift is. 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. Dividend yield is a way to measure how much cash flow you are getting for each dollar invested in an equity position - in other words, how much "bang for your buck" you are getting from dividends. KYN has a dividend yield of 6.8%. A stock's dividend yield depends on the nature of a company's business, its posture in the marketplace (value or growth oriented), its earnings and cash flow, and its dividend policy. SEE: Dividend Yield For The Downturn
Franklin (NYSE:BEN) has moved up 2.8% and is currently trading at $114.05 per share. The company is currently trading a volume of 178,426 shares. In technical analysis, trading volume is used to determine the strength of a market indicator. 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. BEN has a debt ratio of 35.8%, 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.
BlackRock (NYSE:BLK) is up 2.8% to reach a current price of $173.15 per share. With 209,835 shares changing hands so far today, the company's volume is 0.3 times the average volume over the last three months. The trading volume for a stock indicates the level of investor interest. Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. The price/sales ratio measures a company's stock market price by its revenues. The P/S ratio for BLK is 3.4, which is relatively high. 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.
Westpac Banking Corporation (NYSE:WBK) has risen 2.6% to hit a current price of $124.98 per share. So far today, the company's volume is 35,612 shares. This is greater than yesterday's volume of 30,628 shares. If a stock price moves on high volume, this means that the change is a significant one. 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 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. The capitalization ratio for WBK is 79.4%, which is fairly high. The company may have trouble meeting operating and debt liabilities on time and surviving adverse economic conditions. 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.
The Bottom Line No matter the economic climate, Wall Street will always have stocks that make major moves each week. 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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