Filed Under: ,
Tickers in this Article: ISIS, COO, UTHR, CYBX, CELG, GILD, PCYC
So far today, the Nasdaq has climbed 0.4%, the S&P 500 is up 0.1% and the Dow is trading down 0.2%. The healthcare sector is the category of stocks relating to medical and healthcare goods or services. This sector includes hospital management firms, health maintenance organizations (HMOs), biotechnology and a variety of medical products. Stocks in the healthcare sector are often considered to be defensive because the products and services are essential. Even during economic downturns, people will still require medical aid and medicine to overcome illness. Having a consistent demand for goods and services makes this sector less sensitive to business cycle fluctuations.

These are the biggest movers in the Healthcare sector (XLV) (+0.3%):
CompanyMarket CapPercentage Change
ISIS Pharmaceuticals (Nasdaq:ISIS).39 billion-3.6%
Cooper Companies (NYSE:COO).5 billion+3.4%
United (Nasdaq:UTHR).93 billion+3.1%
Cyberonics (Nasdaq:CYBX).42 billion+2.7%
Celgene (Nasdaq:CELG).12 billion+2.3%
Gilead (Nasdaq:GILD).02 billion+2.2%
Pharmacyclics (Nasdaq:PCYC).56 billion+1.8%
Investopedia Markets: Explore the best one-stop source for financial news

Slipping 3.6%, ISIS Pharmaceuticals (Nasdaq:ISIS) is currently trading at $13.27 per share. The company is currently trading a volume of 463,724 shares. High volume indicates a lot of investor interest while low volume indicates the opposite. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. 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 ISIS is 67.3%, which is relatively high. As such, the company is highly leveraged and not highly liquid. 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.

Cooper Companies (NYSE:COO) has moved up 3.4% and is currently trading at $97.21 per share. So far today, the company's volume is 358,493 shares, one times the current three-month average. 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. 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. COO has a P/E ratio of 19.7, high compared to the industry average of 8.74. This could mean that the market is expecting big things over the next few months or years. A high P/E ratio indicates a stock that is expensive, while a low P/E ratio indicates a stock that is cheap. SEE: Can Investors Trust the P/E Ratio?

United (Nasdaq:UTHR) has risen 3.1% and is currently trading at $58.38 per share. The company is trading at a volume of 231,364 shares. This is on pace to fall short of yesterday's volume of 1.2 million shares. In technical analysis, trading volume is used to determine the strength of a market indicator. Valuation ratios allow the investor to make a quick determination as to a company's investment value. 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. UTHR has a debt-equity ratio of 27%, which is on the low side. 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.

Cyberonics (Nasdaq:CYBX) has risen 2.7% and is currently trading at $52.91 per share. So far today, the company's volume is 54,968 shares, 0.2 times the average daily volume. 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. Investment valuation ratios can be very useful in estimating whether a stock price is too high, reasonable or a bargain investment opportunity. As with most ratios, comparisons of company price/earnings to growth ratios (PEG ratios) are most appropriate for similar companies. PEG ratio for CYBX is 1.98. 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.

Celgene (Nasdaq:CELG) is at $78.53 per share after an increase of 2.3%. This morning, the company is trading a volume of 1.6 million shares. If a stock price makes a big move up or down, volume lets us know the significance of that move. Looking at a company's valuation ratios is a good way of getting a basic idea as to its value as an investment. The price/book value ratio provides a way of evaluating whether a stock is relatively cheap or expensive. The P/B ratio for CELG is 5.69, indicating that the stock is trading for more 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. A weakness of the P/B value ratio is that while the price component is easily determined by looking at the stock quote, the book value component is more difficult to estimate and more open to individual interpretation and analysis. SEE: Using The Price-To-Book Ratio To Evaluate Companies

Gilead (Nasdaq:GILD) is currently trading at $68.95 per share, a 2.2% increase. With 4.8 million shares changing hands so far today, the company's volume is in keeping with the average volume over the past three months. If a stock price moves on high volume, this means that the change is a significant one. 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. A price/sales ratio is derived by dividing stock market price by company sales. The P/S ratio for GILD is a high 4.31. 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.

Pharmacyclics (Nasdaq:PCYC) has increased to a share price of $66.72, a 1.8% rise. The company's volume for the day so far is 164,872 shares. At this rate, trading activity will likely be down from yesterday when 426,247 shares changed hands. High volume indicates a lot of investor interest while low volume indicates the opposite. Valuation ratios include 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 ratio is calculated by dividing total liabilities by total assets. The debt ratio for PCYC is a low 39.7%. A low debt ratio means the company has more available cash flow. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.

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. However, these fundamental metrics must be analyzed with historic data, industry information in addition to firm specific financial statements.

comments powered by Disqus

Trading Center