Filed Under: ,
Tickers in this Article: INFI, CNC, QCOR, REGN, NVO, MDVN, PCYC
The morning has been good for the market. The Nasdaq has moved up 0.1%; the S&P 500 has risen 0.3%; and the Dow has increased 0.4%. 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.

Outperforming the market overall, the Healthcare sector (XLV) is up 0.2% and its biggest movers so far today are:
CompanyMarket CapPercentage Change
Infinity Pharmaceuticals (Nasdaq:INFI)$520.3 million+8.8%
Centene (NYSE:CNC)$2.07 billion-5%
Questcor Pharmaceuticals (Nasdaq:QCOR)$3.07 billion-2.7%
Regeneron Pharmaceuticals (Nasdaq:REGN)$14.29 billion-2.6%
Novo Nordisk A/S (NYSE:NVO)$92.16 billion-2.5%
Medivation (Nasdaq:MDVN)$3.8 billion-1.8%
Pharmacyclics (Nasdaq:PCYC)$4.47 billion+1.7%
Forex Broker Summary: UFXMarkets

Increasing 8.8%, Infinity Pharmaceuticals (Nasdaq:INFI) is trading at $20.75 per share. So far today, the company's volume is 288,202 shares, one times its current three-month average. The trading volume for a stock indicates the level of investor 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 price/sales ratio measures a company's stock market price by its revenues. INFI's P/S ratio of 3.99 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. 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.

Centene (NYSE:CNC) has decreased to $38.14 per share, a 5% fall. So far today, 852,723 shares have changed hands. In technical analysis, trading volume is used to determine the strength of a market indicator. Looking at a company's valuation ratios is a good way of getting a basic idea as to its value as an investment. A simple P/E ratio can reveal the stock's real market value and show how the valuation compares to its industry group or a benchmark like the S&P 500 Index. Compared to the industry average of 10.46, CNC's P/E ratio of 45.1 is quite high. Usually, if a stock has a high P/E ratio, it indicates that the market expects the company to grow earnings quickly in the future. 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: How To Find P/E And PEG Ratios

Falling 2.7%, Questcor Pharmaceuticals (Nasdaq:QCOR) is currently at a share price of $50.07. The company's volume is currently 818,091 shares for the day, consistent with its current daily average. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. 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 gives users a quick measure of the amount of debt that the company has on its balance sheets compared to its assets. The debt ratio for QCOR is a low 35.1%. In other words, the company is less sensitive to changes in business or interest rates since less of its cash flow is dedicated to paying off loan expenses. 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.

At $144.93, Regeneron Pharmaceuticals (Nasdaq:REGN) has slipped 2.6%. The company's volume for the day so far is 247,371 shares. If a stock price moves on high volume, this means that the change is a significant one. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. The price/book value ratio is calculated by dividing the current stock price by the company's book value per share. REGN's stock is trading for more than its book value with a P/B ratio of 23.41. 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 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: Investment Valuation Ratios: Price/Book Value Ratio

Currently trading at $154.94 per share, Novo Nordisk A/S (NYSE:NVO) has fallen 2.5%. At 243,266 shares, the company's volume so far today is 1.2 times the current three-month average. When a stock price moves up or down, watching the volume is a good way of identifying how significant that shift is. Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. The capitalization ratio is calculated by dividing long-term debt by the sum of long-term debt and shareholders' equity. The capitalizion ratio of 1.6% is on the low end. A very low capitalization ratio might be a sign that the company is stagnating and reducing the potential earnings for shareholders. Prudent use of leverage (debt) increases the financial resources available to a company for growth and expansion.

Medivation (Nasdaq:MDVN) has fallen 1.8% and is currently trading at $101.24 per share. The company is currently trading a volume of 281,055 shares. If a stock price makes a big move up or down, volume lets us know the significance of that 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. The debt-equity (D/E) ratio is a measurement of how much suppliers, lenders, creditors and obligors have committed to the company versus what the shareholders have committed. MDVN has a D/E ratio of 228%, which is relatively high. Companies in capital-intensive industries usually have higher D/E ratios because they need to buy more property, plants, and equipment to operate. This easy-to-calculate ratio provides a general indication of a company's equity-liability relationship and is helpful to investors looking for a quick take on a company's leverage.

After rising 1.7%, Pharmacyclics (Nasdaq:PCYC) is currently trading at a share price of $65.40. At 105,349 shares, the company's volume so far today is 0.1 times the average daily volume. Volume indicates the level of interest that investors have in a company at its current price. 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. The price/sales ratio is used for spotting recovery situations or for double-checking that a company's growth has not become overvalued. The P/S ratio for PCYC is a high 46.28. This could be a good sign if the share price increases. All things being equal, a low P/S ratio is good news for investors, while a very high one can be a warning sign.

The Bottom Line On any given day, a particular stock may see positive or negative change in its share price. 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.

comments powered by Disqus

Trading Center