Filed Under: ,
Tickers in this Article: EXK, EGO, IAG, PAAS, AEM, AUY, ABX
The market is doing well so far today. The Nasdaq is up 0.1%; the S&P 500 has climbed 0.2%; and the Dow has moved up 0.3%.

Despite a good day for the overall market so far, the Gold and Silver sector (SLV) is down 0.4% and its current biggest movers are:
CompanyMarket CapPercentage Change
Endeavour Silver Corp (NYSE:EXK)$1.01 billion+5%
Eldorado Gold Corporation (NYSE:EGO)$11.12 billion+2.8%
IAMGOLD Corporation (NYSE:IAG)$5.96 billion+2.4%
Pan American Silver Corp (Nasdaq:PAAS)$3.27 billion+2.3%
Agnico-Eagle Mines Limited (NYSE:AEM)$8.89 billion+2.3%
Yamana Gold Inc (NYSE:AUY)$14.31 billion+1.8%
Barrick Gold Corporation (NYSE:ABX)$42.07 billion+1.6%
Beginner's Guide To NinjaTrader Trading Software

After rising 5%, Endeavour Silver Corp (NYSE:EXK) is currently trading at a share price of $10.65. This morning, the company is trading a volume of 1.1 million shares. High volume indicates a lot of investor interest while low volume indicates the opposite. Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. The price/book value ratio is especially important for value investors as it can provide an indication of the true value of a company's assets at a time when its business model may be failing. EXK's P/B ratio of 3.96 shows that its share price is higher 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. Users need to be careful when applying this ratio though, as it is more useful for industrial companies that have a lot of tangible assets than it is for technology or consumer product companies that may not have much in the way of hard assets. SEE: Investment Valuation Ratios: Price/Book Value Ratio

Increasing 2.8%, Eldorado Gold Corporation (NYSE:EGO) is trading at $16.02 per share. So far today, the company's volume is 2.8 million shares, in keeping with its current three-month average. 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 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. 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 EGO is 0.8%, which is on the low end. This could indicate that that the stock is overpriced or that future dividends might be higher. 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

Rising 2.4%, IAMGOLD Corporation (NYSE:IAG) is currently trading at $16.21 per share. The company's volume is currently 2.1 million shares. This is about the same trading activity as there was yesterday. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. 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. Perhaps one of the most widely-used stock analysis tools is the price-to-earnings ratio, or P/E. IAG's P/E ratio is 17.2. High P/E stocks could be "growth" stocks, while low PE stocks may be "value" stocks. SEE: Can Investors Trust the P/E Ratio?

Pan American Silver Corp (Nasdaq:PAAS) has moved up 2.3% and is currently trading at $21.98 per share. So far today, the company's volume is 1.5 million shares, consistent with its current daily average. If a stock price moves on high volume, this means that the change is a significant one. Understanding investment valuation ratios allows an investor to assess the true 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. PAAS has a low debt ratio of 20.1%. A low debt ratio means the company has more available cash flow. 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.

Agnico-Eagle Mines Limited (NYSE:AEM) is up 2.3% to reach a current price of $53.03 per share. The company's volume for the day so far is 880,624 shares. If a stock price makes a big move up or down, volume lets us know the significance of that move. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. The price/sales ratio measures a company's stock market value by its total revenues or alternatively, a company's price per share by its revenue per share. AEM's P/S ratio of 3.63 is on the high side. 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.

Yamana Gold Inc (NYSE:AUY) is currently trading at $19.40 per share, a 1.8% increase. At 4.3 million shares, the company's volume so far today is 0.6 times its average over the past three months. In technical analysis, trading volume is used to determine the strength of a market indicator. 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 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 capitalizion ratio of 9.2% is on the low end. A low capitalization ratio can signify a failure to leverage equity into investment, missing valuable opportunities for growth and expansion. 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.

Barrick Gold Corporation (NYSE:ABX) has risen 1.6% and is currently trading at $42.73 per share. So far today, the company's volume is 3.6 million 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. 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-equity (D/E) ratio compares the total liabilities for a company to its total shareholder equity. ABX has a D/E ratio of 56%. The D/E ratio is not a pure measurement of a company's debt because it includes operational liabilities in total liabilities.

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. Keep in mind that all these ratios should be compared against historical numbers and industry information in order to get a more complete picture.

comments powered by Disqus

Trading Center