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Gold and Silver Stocks, Including Barrick Gold Corporation, Making Big Moves on September 24, 2012
It's been a bad day for the market after the morning's trading. The Nasdaq is trading down 0.7%; the S&P 500 is down 0.2%; and the Dow has slipped 0.2%.
The Gold and Silver sector (SLV) is currently lagging behind the overall market, down 1.5%, and its current biggest movers are:
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After a decline of 4%, Pan American Silver Corp (Nasdaq:PAAS) has hit a share price of $21.57. The company's volume for the day so far is 1.7 million shares. A stock's volume conveys how excited investors are about it. Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. A price/sales ratio is derived by dividing stock market price by company sales. PAAS has a high P/S ratio of 3.8. 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.
First Majestic (NYSE:AG) is currently trading at a share price of $23.05, a 2.9% decline. So far today, the company's volume is 496,668 shares, 0.3 times its current daily average. Volume is an important indicator because it indicates how significant a price shift is. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. The debt ratio shows the proportion of assets that a company is financing through debt. AG's debt ratio of 22.2% is on the low side. This indicates that the company engages in conservative financing with opportunities to borrow in the future at no significant risk. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.
Falling 2.4%, Coeur d'Alene (NYSE:CDE) is currently at a share price of $28.37. So far today, the company's volume is one million shares. At this rate, trading activity will likely be down from yesterday when 5.3 million shares changed hands. 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. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. The capitalization ratio is calculated by dividing long-term debt by the sum of long-term debt and shareholders' equity. CDE's capitalization ratio is 2.4%, which is relatively low. Investors generally consider a company with low debt and high equity levels is a good quality investment. The capitalization ratio is one of the more meaningful debt ratios because it focuses on the relationship of debt liabilities as a component of a company's total capital base, which is the capital raised by shareholders and lenders.
Currently trading at $50.85 per share, Agnico-Eagle Mines Limited (NYSE:AEM) has fallen 2.3%. The company's volume is currently 719,234 shares for the day, 0.3 times its average over the past three months. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. The debt-equity (D/E) ratio is a leverage ratio. AEM has a low debt-equity ratio of 26%. 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.
Randgold Resources Ltd (Nasdaq:GOLD) has decreased to $121.21 per share, a 2.1% fall. This morning, the company is trading a volume of 391,229 shares. 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. 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/book value ratio provides a way of evaluating whether a stock is relatively cheap or expensive. GOLD's stock is trading for more than its book value with a P/B ratio of 4.68. This implies that investors expect management to create more value from a given set of assets and/or that the market value of the firm's assets is significantly higher than their accounting value. P/B has its shortcomings but is still widely used as a valuation metric, more relevant for use by investors looking at capital-intensive or finance-related businesses, such as banks; book value does not carry much meaning for service-based firms with few tangible assets. SEE: Using The Price-To-Book Ratio To Evaluate Companies
Slipping 1.8%, Barrick Gold Corporation (NYSE:ABX) is currently trading at $42.07 per share. So far today, the company's volume is 3.5 million shares, 0.4 times the average daily volume. 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. 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 dividend yield is calculated by dividing a company's dividends per share by its stock price. The dividend yield for ABX is 1.9%, which is on the low end. This could indicate that that the stock is overpriced or that future dividends might be higher. A higher dividend yield may indicate a risk of a fall in the price of the security, or a cut in the level of dividend payments, either of which would have the effect of dropping future returns. SEE: Due Diligence On Dividends
Silver Wheaton Corp (NYSE:SLW) is trading at $39.24 per share, down 1.7%. So far today, two million shares of the company's stock have changed hands. At this rate, trading activity will likely be down from yesterday when 9.1 million shares changed hands. If a stock price moves on high volume, this means that the change is a significant one. 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. While measuring a price/earnings ratio (P/E ratio) is a popular valuation technique, the measure cannot be calculated for companies without earnings, so some investors analyze the price/sales ratio. The P/S ratio for SLW is 12.2, which is relatively high. 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.
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. 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 Gold and Silver sector (SLV) is currently lagging behind the overall market, down 1.5%, and its current biggest movers are:
| Company | Market Cap | Percentage Change |
| Pan American Silver Corp (Nasdaq:PAAS) | $3.42 billion | -4% |
| First Majestic (NYSE:AG) | $2.74 billion | -2.9% |
| Coeur d\'Alene (NYSE:CDE) | $2.61 billion | -2.4% |
| Agnico-Eagle Mines Limited (NYSE:AEM) | $8.93 billion | -2.3% |
| Randgold Resources Ltd (Nasdaq:GOLD) | $11.38 billion | -2.1% |
| Barrick Gold Corporation (NYSE:ABX) | $42.89 billion | -1.8% |
| Silver Wheaton Corp (NYSE:SLW) | $14.12 billion | -1.7% |
After a decline of 4%, Pan American Silver Corp (Nasdaq:PAAS) has hit a share price of $21.57. The company's volume for the day so far is 1.7 million shares. A stock's volume conveys how excited investors are about it. Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. A price/sales ratio is derived by dividing stock market price by company sales. PAAS has a high P/S ratio of 3.8. 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.
First Majestic (NYSE:AG) is currently trading at a share price of $23.05, a 2.9% decline. So far today, the company's volume is 496,668 shares, 0.3 times its current daily average. Volume is an important indicator because it indicates how significant a price shift is. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. The debt ratio shows the proportion of assets that a company is financing through debt. AG's debt ratio of 22.2% is on the low side. This indicates that the company engages in conservative financing with opportunities to borrow in the future at no significant risk. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.
Falling 2.4%, Coeur d'Alene (NYSE:CDE) is currently at a share price of $28.37. So far today, the company's volume is one million shares. At this rate, trading activity will likely be down from yesterday when 5.3 million shares changed hands. 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. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. The capitalization ratio is calculated by dividing long-term debt by the sum of long-term debt and shareholders' equity. CDE's capitalization ratio is 2.4%, which is relatively low. Investors generally consider a company with low debt and high equity levels is a good quality investment. The capitalization ratio is one of the more meaningful debt ratios because it focuses on the relationship of debt liabilities as a component of a company's total capital base, which is the capital raised by shareholders and lenders.
Currently trading at $50.85 per share, Agnico-Eagle Mines Limited (NYSE:AEM) has fallen 2.3%. The company's volume is currently 719,234 shares for the day, 0.3 times its average over the past three months. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. The debt-equity (D/E) ratio is a leverage ratio. AEM has a low debt-equity ratio of 26%. 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.
Randgold Resources Ltd (Nasdaq:GOLD) has decreased to $121.21 per share, a 2.1% fall. This morning, the company is trading a volume of 391,229 shares. 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. 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/book value ratio provides a way of evaluating whether a stock is relatively cheap or expensive. GOLD's stock is trading for more than its book value with a P/B ratio of 4.68. This implies that investors expect management to create more value from a given set of assets and/or that the market value of the firm's assets is significantly higher than their accounting value. P/B has its shortcomings but is still widely used as a valuation metric, more relevant for use by investors looking at capital-intensive or finance-related businesses, such as banks; book value does not carry much meaning for service-based firms with few tangible assets. SEE: Using The Price-To-Book Ratio To Evaluate Companies
Slipping 1.8%, Barrick Gold Corporation (NYSE:ABX) is currently trading at $42.07 per share. So far today, the company's volume is 3.5 million shares, 0.4 times the average daily volume. 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. 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 dividend yield is calculated by dividing a company's dividends per share by its stock price. The dividend yield for ABX is 1.9%, which is on the low end. This could indicate that that the stock is overpriced or that future dividends might be higher. A higher dividend yield may indicate a risk of a fall in the price of the security, or a cut in the level of dividend payments, either of which would have the effect of dropping future returns. SEE: Due Diligence On Dividends
Silver Wheaton Corp (NYSE:SLW) is trading at $39.24 per share, down 1.7%. So far today, two million shares of the company's stock have changed hands. At this rate, trading activity will likely be down from yesterday when 9.1 million shares changed hands. If a stock price moves on high volume, this means that the change is a significant one. 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. While measuring a price/earnings ratio (P/E ratio) is a popular valuation technique, the measure cannot be calculated for companies without earnings, so some investors analyze the price/sales ratio. The P/S ratio for SLW is 12.2, which is relatively high. 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.
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. 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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