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Tickers in this Article: TDF, CNS, BAP, OAK, ASPS, COF, ARCC
The Nasdaq has moved up 0.1%, the S&P 500 is trading up 0.3% and the Dow has risen 0.4% on a good day for the market so far. 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 0.7%, outperforming the market overall. The biggest movers in the sector so far are:
CompanyMarket CapPercentage Change
Templeton Dragon Fund (NYSE:TDF)$980.9 million-3.5%
Cohen & Steers (NYSE:CNS)$1.47 billion-3.4%
Credicorp Ltd (NYSE:BAP)$9.66 billion+3.2%
Oaktree Capital (NYSE:OAK)$5.72 billion+3.1%
Altisource Portfolio Solutions (Nasdaq:ASPS)$2.04 billion+2.7%
Capital One (NYSE:COF)$32.81 billion+2.4%
Ares (Nasdaq:ARCC)$4.39 billion-2.4%
Investopedia Markets: Explore the best one-stop source for financial news

At $25, Templeton Dragon Fund (NYSE:TDF) has slipped 3.5%. The company's volume for the morning is 107,093 shares. This is 1.9 times the average daily volume. In technical analysis, trading volume is used to determine the strength of a market indicator. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. Dividend yield measures the income that a stock will generate for an investor. Dividend yield for TDF is 3.4%. For income-oriented investors such as retirees, a stock with a high dividend yield may be more attractive than a stock with a low dividend yield. SEE: Due Diligence On Dividends

Cohen & Steers (NYSE:CNS) has decreased to $32.55 per share, a 3.4% fall. This morning, the company is trading a volume of 89,735 shares. 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. 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. There are generally two price/earnings ratios calculated: the first, called the trailing Price/Earnings ratio, is calculated using the previous years actual earnings; the second, called forward Price/Earnings ratio, is calculated using the next year's estimated earnings. Compared to the industry average of 21.42, CNS' P/E ratio of 25.0 is quite high. This could mean that the market is expecting big things over the next few months or years. High P/E stocks could be "growth" stocks, while low PE stocks may be "value" stocks. SEE: Can Investors Trust the P/E Ratio?

Credicorp Ltd (NYSE:BAP) has risen 3.2% to hit a current price of $124.94 per share. At 156,433 shares, the company's volume so far today is 0.8 times its current three-month average. 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. The debt ratio shows the proportion of assets that a company is financing through debt. BAP's debt ratio of 89.5% is fairly high. This means that most of the company's assets are financed through debt. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.

Oaktree Capital (NYSE:OAK) is currently trading at $39.19 per share, a 3.1% increase. The company's volume for the day so far is 107,349 shares. This is a sign that there will be less trading activity than there was yesterday. 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 provide investors with an estimation, albeit a simplistic one, of the value of a stock. The price/sales ratio measures a company's stock market price by its revenues. The P/S ratio for OAK is a high 38.01. This could be a good sign if the share price increases. 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.

Altisource Portfolio Solutions (Nasdaq:ASPS) is up 2.7% to reach a current price of $89.93 per share. The company's volume is currently 43,053 shares for the day, consistent with its current daily average. High volume indicates a lot of investor interest while low volume indicates the opposite. Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. The price/book value ratio is calculated by dividing the current stock price by the company's book value per share. The P/B ratio for ASPS is 10.37, indicating that the stock is trading for more than its book value. This high share price relative to asset value is likely to indicate that the company has been earning a very high return on its assets. All else being equal, a stock with a low P/B value ratio is more attractive than a stock with a high ratio. SEE: Investment Valuation Ratios: Price/Book Value Ratio

After an increase of 2.4%, Capital One (NYSE:COF) has reached a current price of $57.85. The company's volume for the day so far is 3.1 million shares. Volume is an important indicator because it indicates how significant a price shift is. 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. 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. The dividend yield for COF is 0.4%, which is on the low end. A company with a low dividend yield may be a safer investment in the long run. 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

After a decline of 2.4%, Ares (Nasdaq:ARCC) has hit a share price of $17.25. The company's volume is currently 770,659 shares for the day, 0.4 times the average volume over the last three months. Volume indicates the level of interest that investors have in a company at its current price. 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. A company's price/earnings ratio (P/E ratio) provides a measure of how expensive or cheap a stock is. ARCC's P/E ratio of 10.5 falls below the industry average of 11.68. 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. A high or low P/E ratio is not good or bad in and of itself, but a company trading with a high P/E ratio must continue to post strong financial performance or its stock price is likely to fall. SEE: Understanding The P/E Ratio

The Bottom Line No matter the economic climate, Wall Street will always have stocks that make major moves each week. It is important to weigh current activity against historical performance when making any investment decisions. However, these fundamental metrics must be analyzed with historic data, industry information in addition to firm specific financial statements.

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