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Tickers in this Article: TCAP, NSM, ANAT, CNS, GPN, THG, WABC
The Nasdaq is down 0.6%, the S&P 500 is unchanged and the Dow is trading up 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 biggest movers in the Financial sector (XLF) (+0.1%) are:
CompanyMarket CapPercentage Change
Triangle (NYSE:TCAP)$701.9 million-4.2%
Nationstar Mortgage Holdings (NYSE:NSM)$2.49 billion+2.8%
American National Insurance (Nasdaq:ANAT)$1.89 billion+2.7%
Cohen & Steers (NYSE:CNS)$1.51 billion-2.5%
Global Payments (NYSE:GPN)$3.3 billion+2%
Hanover Insurance Group (NYSE:THG)$1.62 billion+1.8%
WestAmerica (Nasdaq:WABC)$1.33 billion-1.7%
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Triangle (NYSE:TCAP) has decreased to $24.64 per share, a 4.2% fall. The company's volume for the day so far is 162,237 shares. This is on pace to reach yesterday's trading volume of 349,433 shares. When a stock price moves up or down, watching the volume is a good way of identifying how significant that shift is. 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 P/E ratio has been used for ages by analysts and still remains one of the most relevant pieces of stock valuation. Relative to the industry P/E ratio of 11.68, TCAP's 10.5 is low. Companies with low P/E ratios may find it easier to surprise the market to the upside, even if their financial performance is not as strong as that of companies with high P/E ratios. 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: Can Investors Trust the P/E Ratio?

After an increase of 2.8%, Nationstar Mortgage Holdings (NYSE:NSM) has reached a current price of $28.66. The company's volume for the day so far is 320,851 shares, 0.3 times its average over the past 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. Understanding investment valuation ratios allows an investor to assess the true value of an individual stock. If the price/book value ratio of a stock is high, it may indicate that the stock is expensive, while a lower ratio may indicate that the stock is a bargain. NSM's P/B ratio of 4.04 shows that its share price is higher than its book value. This may be a sign that the company is overvalued. P/B value ratios are particularly useful to value investors, distressed or "vulture" investors, or any other investors purchasing beaten-down securities but are less useful to investors focused on growth stocks, purchasing IPOs, or investing in technology or other "asset-lite" companies. SEE: How Buybacks Warps The Price-To-Book Ratio

American National Insurance (Nasdaq:ANAT) is up 2.7% to reach a current price of $72.23 per share. So far today, the company's volume is 18,335 shares. 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. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. The dividend yield is calculated by dividing a company's dividends per share by its stock price. ANAT has a dividend yield of 4.4%. It is important to remember that dividends are only one component of a stock's return and capital appreciation (or decline) must also be considered when evaluating a security. SEE: Investment Valuation Ratios: Dividend Yield

Cohen & Steers (NYSE:CNS) is currently trading at a share price of $33.63, a 2.5% decline. The company's volume is currently 26,552 shares for the day, 0.2 times the current daily average. High volume indicates a lot of investor interest while low volume indicates the opposite. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. 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 CNS is a high 6.0. In young companies, a high P/S ratio is a sign of sales growth that is expected to turn into earnings and cash flow. 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.

Global Payments (NYSE:GPN) is currently trading at $42.69 per share, a 2% increase. So far today, the company's volume is 244,993 shares. At this rate, trading activity will likely be down from yesterday when 938,146 shares changed hands. 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 debt ratio measures the leverage of a company, and a company's leverage is a good way to assess risk. The debt ratio for GPN is 56.4%. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.

Hanover Insurance Group (NYSE:THG) has risen 1.8% to hit a current price of $36.78 per share. With 159,368 shares changing hands so far today, the company's volume is 0.8 times its current three-month average. If a stock price makes a big move up or down, volume lets us know the significance of that move. 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. The debt-equity (D/E) ratio compares the total liabilities for a company to its total shareholder equity. THG has a debt-equity ratio of 35%, which is on the low side. This shows that the company's assets are financed primarily through equity. The D/E ratio is not a pure measurement of a company's debt because it includes operational liabilities in total liabilities.

Slipping 1.7%, WestAmerica (Nasdaq:WABC) is currently trading at $47.27 per share. The company's volume for the day so far is 41,825 shares. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. 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 price/earnings to growth (PEG) ratio divides a company's P/E ratio by its growth rate of earnings-per-share. PEG ratio for WABC is 5.41. Because of the adjustment for earnings growth rate, the PEG ratio is somewhat more useful than many formulas for comparing companies in different industries.

The Bottom Line No matter the economic climate, Wall Street will always have stocks that make major moves each week. Paying close attention to the previous ratios will help you identify key times to adjust your strategy. However, these fundamental metrics must be analyzed with historic data, industry information in addition to firm specific financial statements.

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