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Financial Stocks Making Big Moves on July 18, 2012
The Nasdaq has climbed 1.2%, the S&P 500 has increased 0.6% and the Dow is trading up 0.7% 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 down 0.2% on a good day for the market overall. The biggest movers in the sector so far are:
Forex Broker Summary: Forex Capital Markets (FXCM)
After a decline of 5.1%, MB Financial (Nasdaq:MBFI) has hit a share price of $21.19. So far today, 296,410 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. 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/earnings ratio is calculated by taking a stock price and dividing it by the earnings-per-share (EPS). Compared to the industry average of 14.13, MBFI's P/E ratio of 23.1 is quite high. This could mean that the market is expecting big things over the next few months or years. 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: The P/E Ratio: A Good Market-Timing Indicator
Popular (Nasdaq:BPOP) is currently trading at a share price of $15.47, a 5.1% decline. At one million shares, the company's volume so far today is 0.8 times its current three-month average. Volume is an important indicator because it indicates how significant a price shift is. 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 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 a good value when purchasing a stock with a high price/earnings ratio (P/E ratio). BPOP's PEG ratio of 1.19 is in line with the industry average. Because of the adjustment for earnings growth rate, the PEG ratio is somewhat more useful than many formulas for comparing companies in different industries.
Molina Healthcare (NYSE:MOH) has risen 5% to hit a current price of $27.67 per share. So far today, the company's volume is 243,085 shares. Trading activity is down from yesterday when 335,259 shares changed hands. If a stock price moves on high volume, this means that the change is a significant one. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. The easy-to-calculate debt ratio is helpful to investors looking for a quick take on the leverage for a company. The debt ratio for MOH is 55.4%. 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.
United Fire Group (Nasdaq:UFCS) has risen 4.4% and is currently trading at $22.23 per share. The company's volume is currently 12,145 shares for the day, 0.3 times its current daily average. High volume indicates a lot of investor interest while low volume indicates the opposite. 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. Dividend yield measures the income that a stock will generate for an investor. UFCS has a dividend yield of 2.8%. To calculate the dividend yield, divide the level of dividends by the stock price; the higher the yield, the more attractive the security. SEE: Dividend Yield For The Downturn
Fidelity National (NYSE:FIS) has fallen 3.2% and is currently trading at $33.12 per share. The company's volume for the day so far is 2.2 million shares. In technical analysis, trading volume is used to determine the strength of a market indicator. Margin analysis is a great way to understand the profitability of companies. FIS' gross profit margin is 42.9%. Operating margin provides a measure of a company's ability to pay its fixed costs such as interest on debt, particular if its business were to decline in the future. Operating profit margin for FIS is 15.9%. Net profit margin compares net income with sales. Net profit margin for the company is 8.2%.
Valuation ratios allow the investor to make a quick determination as to a company's investment value. In a nutshell, the price/sales ratio shows how much Wall Street values every dollar of the company's sales. FIS' P/S ratio of 1.68 is on the high side. This could be a good sign if the share price increases. It is important to compare P/S ratios for companies in the same industry, as ratios can vary quite widely for companies in different industries.
Woori Finance Holdings Co., Ltd (NYSE:WF) is down 3.1% to reach $29.32 per share. With 5,350 shares changing hands so far today, the company's volume is 0.6 times its average over the past 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. Valuation ratios like 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 are useful in determining how attractive a potential or existing investment is. The price/book value ratio provides a way of evaluating whether a stock is relatively cheap or expensive. The P/B ratio for WF is 0.5 because the stock is trading for less than its book value. This could mean that either the market believes the asset value is overstated, or the company is earning a very poor (even negative) return on its assets. One problem with the P/B value ratio is that it can be difficult to calculate the true book value of a company, so investors should be aware that many measures of book value may provide only a rough estimate, and should be taken with a grain of salt. SEE: Investment Valuation Ratios: Price/Book Value Ratio
Currently trading at $46.01 per share, Northern (Nasdaq:NTRS) has fallen 2.3%. So far today, 773,172 shares of the company's stock have changed hands. This is less trading activity than there was yesterday. 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. 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. The debt-equity (D/E) ratio compares the total liabilities for a company to its total shareholder equity. The D/E ratio for NTRS is 73%. The D/E ratio percentage provides a much more dramatic perspective on a company's leverage position than the debt ratio percentage.
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. Keep in mind that all these ratios should be compared against historical numbers and industry information in order to get a more complete picture.
The Financial sector (XLF) is down 0.2% on a good day for the market overall. The biggest movers in the sector so far are:
| Company | Market Cap | Percentage Change |
| MB Financial, Inc. (Nasdaq:MBFI) | $1.22 billion | -5.1% |
| Popular, Inc. (Nasdaq:BPOP) | $1.68 billion | -5.1% |
| Molina Healthcare, Inc. (NYSE:MOH) | $1.22 billion | +5% |
| United Fire Group, Inc. (Nasdaq:UFCS) | $543.1 million | +4.4% |
| Fidelity National Info (NYSE:FIS) | $10.09 billion | -3.2% |
| Woori Finance Holdings Co., Ltd. (ADR) (NYSE:WF) | $8.13 billion | -3.1% |
| Northern Trust (Nasdaq:NTRS) | $11.35 billion | -2.3% |
After a decline of 5.1%, MB Financial (Nasdaq:MBFI) has hit a share price of $21.19. So far today, 296,410 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. 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/earnings ratio is calculated by taking a stock price and dividing it by the earnings-per-share (EPS). Compared to the industry average of 14.13, MBFI's P/E ratio of 23.1 is quite high. This could mean that the market is expecting big things over the next few months or years. 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: The P/E Ratio: A Good Market-Timing Indicator
Popular (Nasdaq:BPOP) is currently trading at a share price of $15.47, a 5.1% decline. At one million shares, the company's volume so far today is 0.8 times its current three-month average. Volume is an important indicator because it indicates how significant a price shift is. 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 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 a good value when purchasing a stock with a high price/earnings ratio (P/E ratio). BPOP's PEG ratio of 1.19 is in line with the industry average. Because of the adjustment for earnings growth rate, the PEG ratio is somewhat more useful than many formulas for comparing companies in different industries.
Molina Healthcare (NYSE:MOH) has risen 5% to hit a current price of $27.67 per share. So far today, the company's volume is 243,085 shares. Trading activity is down from yesterday when 335,259 shares changed hands. If a stock price moves on high volume, this means that the change is a significant one. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. The easy-to-calculate debt ratio is helpful to investors looking for a quick take on the leverage for a company. The debt ratio for MOH is 55.4%. 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.
United Fire Group (Nasdaq:UFCS) has risen 4.4% and is currently trading at $22.23 per share. The company's volume is currently 12,145 shares for the day, 0.3 times its current daily average. High volume indicates a lot of investor interest while low volume indicates the opposite. 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. Dividend yield measures the income that a stock will generate for an investor. UFCS has a dividend yield of 2.8%. To calculate the dividend yield, divide the level of dividends by the stock price; the higher the yield, the more attractive the security. SEE: Dividend Yield For The Downturn
Fidelity National (NYSE:FIS) has fallen 3.2% and is currently trading at $33.12 per share. The company's volume for the day so far is 2.2 million shares. In technical analysis, trading volume is used to determine the strength of a market indicator. Margin analysis is a great way to understand the profitability of companies. FIS' gross profit margin is 42.9%. Operating margin provides a measure of a company's ability to pay its fixed costs such as interest on debt, particular if its business were to decline in the future. Operating profit margin for FIS is 15.9%. Net profit margin compares net income with sales. Net profit margin for the company is 8.2%.
Valuation ratios allow the investor to make a quick determination as to a company's investment value. In a nutshell, the price/sales ratio shows how much Wall Street values every dollar of the company's sales. FIS' P/S ratio of 1.68 is on the high side. This could be a good sign if the share price increases. It is important to compare P/S ratios for companies in the same industry, as ratios can vary quite widely for companies in different industries.
Woori Finance Holdings Co., Ltd (NYSE:WF) is down 3.1% to reach $29.32 per share. With 5,350 shares changing hands so far today, the company's volume is 0.6 times its average over the past 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. Valuation ratios like 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 are useful in determining how attractive a potential or existing investment is. The price/book value ratio provides a way of evaluating whether a stock is relatively cheap or expensive. The P/B ratio for WF is 0.5 because the stock is trading for less than its book value. This could mean that either the market believes the asset value is overstated, or the company is earning a very poor (even negative) return on its assets. One problem with the P/B value ratio is that it can be difficult to calculate the true book value of a company, so investors should be aware that many measures of book value may provide only a rough estimate, and should be taken with a grain of salt. SEE: Investment Valuation Ratios: Price/Book Value Ratio
Currently trading at $46.01 per share, Northern (Nasdaq:NTRS) has fallen 2.3%. So far today, 773,172 shares of the company's stock have changed hands. This is less trading activity than there was yesterday. 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. 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. The debt-equity (D/E) ratio compares the total liabilities for a company to its total shareholder equity. The D/E ratio for NTRS is 73%. The D/E ratio percentage provides a much more dramatic perspective on a company's leverage position than the debt ratio percentage.
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. Keep in mind that all these ratios should be compared against historical numbers and industry information in order to get a more complete picture.
by
Investopedia Staff
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