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HollyFrontier and Other Oil and Gas Operations Stocks Making Big Moves on September 13, 2012
It's been a good morning for the market. The Nasdaq has climbed 0.3%; the S&P 500 has moved up 0.1%; and the Dow is up 0.2%.
Despite a good day for the overall market so far, the Oil and Gas Operations sector (DIG) is down 0.2% and its current biggest movers are:
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Increasing 3.5%, Whiting (NYSE:WLL) is trading at $51.09 per share. The company's volume is currently 2.3 million shares for the day, 1.3 times the average daily volume. A stock's volume conveys how excited investors are about it. Looking at a company's valuation ratios is a good way of getting a basic idea as to its value as an investment. When used consistently and uniformly, the price/earnings to growth (PEG) ratio is an essential tool that adds dimension to the price/earnings ratio, allows comparisons across diverse industries and is always on the lookout for value. WLL's PEG ratio is 1.19. 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.
Rising 3.4%, Forest (NYSE:FST) is currently trading at $8.49 per share. So far today, 2.2 million shares have changed hands. If a stock price moves on high volume, this means that the change is a significant one. 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 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. FST has a P/B ratio of 1.44 which shows that its share price is higher than its book value. 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. 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: How Buybacks Warps The Price-To-Book Ratio
Currently trading at $83.01 per share, InterOil Corporation (NYSE:IOC) has fallen 3.3%. The company's volume is currently 396,213 shares for the day, in keeping with the average volume over the past three months. Volume indicates the level of interest that investors have in a company at its current price. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. 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 IOC is 2.79, which is relatively high. This could be a good sign if the share price increases. 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.
Venoco (NYSE:VQ) has increased to a share price of $11.85, a 2.7% rise. The company's volume is currently 260,405 shares. At this rate, trading activity will likely be down from yesterday when 1.1 million shares changed hands. The trading volume for a stock indicates the level of investor interest. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. The debt ratio is calculated by dividing total liabilities by total assets. The debt ratio for VQ is 93.1%, which is relatively high. This might mean that the company now has low borrowing capacity, which reduces it's financial flexibility. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.
Slipping 2.5%, Delek US Holdings (NYSE:DK) is currently trading at $25.29 per share. The company's volume is currently 364,711 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. Investment valuation ratios can be very useful in estimating whether a stock price is too high, reasonable or a bargain investment opportunity. The debt-equity (D/E) ratio is a leverage ratio. DK has a debt-equity ratio of 19%, 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.
HollyFrontier (NYSE:HFC) has fallen 2.2% and is currently trading at $39.10 per share. The company's volume for the day so far is 834,096 shares. Price change alone is not enough to know how a stock is doing. Volume is an important secondary indicator used to confirm trends suggested by price movement. Understanding investment valuation ratios allows an investor to assess the true value of an individual stock. 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 19.6% is on the low end. Investors generally consider a company with low debt and high equity levels is a good quality investment. A low level of debt and a healthy proportion of equity in a company's capital structure is an indication of financial fitness.
Swift Energy (NYSE:SFY) is up 2.1% to reach a current price of $21.57 per share. So far today, the company's volume is 191,160 shares, 0.2 times its current three-month average. 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. 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. Using price/earnings ratios (P/E ratios) does not give an indication of whether or not an individual company's ratio is reasonable, a shortcoming that can be corrected by using the price/earnings to growth ratio (PEG ratio). SFY has a PEG ratio of 0.84. 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 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. Tools like valuation ratios and profit margins, however, are only as useful as the context you put them in; remember to take historical data and competitor performance into account.
Despite a good day for the overall market so far, the Oil and Gas Operations sector (DIG) is down 0.2% and its current biggest movers are:
| Company | Market Cap | Percentage Change |
| Whiting (NYSE:WLL) | $5.81 billion | +3.5% |
| Forest (NYSE:FST) | $970.6 million | +3.4% |
| InterOil Corporation (NYSE:IOC) | $4.15 billion | -3.3% |
| Venoco (NYSE:VQ) | $709.3 million | +2.7% |
| Delek US Holdings (NYSE:DK) | $1.52 billion | -2.5% |
| HollyFrontier (NYSE:HFC) | $8.14 billion | -2.2% |
| Swift Energy (NYSE:SFY) | $906.2 million | +2.1% |
Increasing 3.5%, Whiting (NYSE:WLL) is trading at $51.09 per share. The company's volume is currently 2.3 million shares for the day, 1.3 times the average daily volume. A stock's volume conveys how excited investors are about it. Looking at a company's valuation ratios is a good way of getting a basic idea as to its value as an investment. When used consistently and uniformly, the price/earnings to growth (PEG) ratio is an essential tool that adds dimension to the price/earnings ratio, allows comparisons across diverse industries and is always on the lookout for value. WLL's PEG ratio is 1.19. 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.
Rising 3.4%, Forest (NYSE:FST) is currently trading at $8.49 per share. So far today, 2.2 million shares have changed hands. If a stock price moves on high volume, this means that the change is a significant one. 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 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. FST has a P/B ratio of 1.44 which shows that its share price is higher than its book value. 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. 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: How Buybacks Warps The Price-To-Book Ratio
Currently trading at $83.01 per share, InterOil Corporation (NYSE:IOC) has fallen 3.3%. The company's volume is currently 396,213 shares for the day, in keeping with the average volume over the past three months. Volume indicates the level of interest that investors have in a company at its current price. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. 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 IOC is 2.79, which is relatively high. This could be a good sign if the share price increases. 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.
Slipping 2.5%, Delek US Holdings (NYSE:DK) is currently trading at $25.29 per share. The company's volume is currently 364,711 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. Investment valuation ratios can be very useful in estimating whether a stock price is too high, reasonable or a bargain investment opportunity. The debt-equity (D/E) ratio is a leverage ratio. DK has a debt-equity ratio of 19%, 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.
HollyFrontier (NYSE:HFC) has fallen 2.2% and is currently trading at $39.10 per share. The company's volume for the day so far is 834,096 shares. Price change alone is not enough to know how a stock is doing. Volume is an important secondary indicator used to confirm trends suggested by price movement. Understanding investment valuation ratios allows an investor to assess the true value of an individual stock. 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 19.6% is on the low end. Investors generally consider a company with low debt and high equity levels is a good quality investment. A low level of debt and a healthy proportion of equity in a company's capital structure is an indication of financial fitness.
Swift Energy (NYSE:SFY) is up 2.1% to reach a current price of $21.57 per share. So far today, the company's volume is 191,160 shares, 0.2 times its current three-month average. 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. 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. Using price/earnings ratios (P/E ratios) does not give an indication of whether or not an individual company's ratio is reasonable, a shortcoming that can be corrected by using the price/earnings to growth ratio (PEG ratio). SFY has a PEG ratio of 0.84. 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 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. Tools like valuation ratios and profit margins, however, are only as useful as the context you put them in; remember to take historical data and competitor performance into account.
by
Investopedia Staff
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