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Huaneng Power International, Inc. (ADR) and Other Utilities Stocks Making Big Moves
The market is on the rise this morning. The Nasdaq is trading up 1%; the S&P 500 has risen 0.5%; and the Dow has increased 0.6%. The utilities sector is a category of stocks for utilities such as gas and power. It contains companies such as electric, gas and water firms and integrated providers. Because utilities require significant infrastructure, these firms often carry large amounts of debt. With a high debt load, utilities companies become sensitive to changes in the interest rate. As interest rates rise or drop, the debt payments will increase or decrease. The utilities sector performs best when interest rates are falling or remain low.
Despite a good day for the overall market so far, the Utilities sector (XLU) is down 0.2% and its current biggest movers are:
Broker Summary: E-Trade Financial
Falling 6.3%, Huaneng Power International, Inc (NYSE:HNP) is currently at a share price of $26.54. So far today, the company's volume is 83,932 shares. This is 1.1 times the current daily average. In technical analysis, trading volume is used to determine the strength of a market indicator. Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. 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 HNP is 0.9%, which is on the low end. This could indicate that that the stock is overpriced or that future dividends might be higher. 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: Due Diligence On Dividends
Currently trading at $23.77 per share, Crestwood Midstream (NYSE:CMLP) has fallen 4.4%. This morning, 232,433 shares have been traded,. Volume is used to evaluate how meaningful the price movement of a stock is. Investment valuation ratios can be very useful in estimating whether a stock price is too high, reasonable or a bargain investment opportunity. 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 CMLP is a high 5.43. 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.
AES (NYSE:AES) is down 4.3% to reach $11.72 per share. So far today, 6.2 million shares have changed hands. 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. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the 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. AES has a debt ratio of 85.7%, which is on the high side. As such, the company is highly leveraged and not highly liquid. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.
After rising 4.2%, Clean Energy (Nasdaq:CLNE) is currently trading at a share price of $14.55. The company's volume for the day so far is 497,248 shares, consistent with its current three-month average. The trading volume for a stock indicates the level of investor 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. The debt-equity (D/E) ratio compares the total liabilities for a company to its total shareholder equity. CLNE has a D/E ratio of 55%. The D/E ratio is not a pure measurement of a company's debt because it includes operational liabilities in total liabilities.
Inergy (NYSE:NRGM) has risen 3.7% and is currently trading at $24.12 per share. The company's volume for the day so far is 37,773 shares. This is in keeping with its current daily average. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. 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 capitalization ratio is calculated by dividing long-term debt by the sum of long-term debt and shareholders' equity. NRGM has a low capitalization ratio of 12.7%. Low leverage is a significant balance sheet strength, a sign of a less risky investment. 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.
Increasing 2.6%, National Fuel (NYSE:NFG) is trading at $50.66 per share. At 238,366 shares, the company's volume so far today is which is likely to result in less activity than yesterday's volume of 801,222 shares. A stock's volume conveys how excited investors are about it. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. There are generally two price/earnings ratios calculated: the first, called the trailing Price/Earnings ratio, is calculated using the previous years actual earnings; the second, called forward Price/Earnings ratio, is calculated using the next year's estimated earnings. The P/E ratio for NFG is 19.4, above the industry average of 17.07. Generally speaking, the higher the P/E ratio, the higher the market expectations for a company's future performance. A high or low P/E ratio is not good or bad in and of itself, but a company trading with a high P/E ratio must continue to post strong financial performance or its stock price is likely to fall. SEE: How To Find P/E And PEG Ratios
DCP Midstream (NYSE:DPM) is trading at $42.50 per share, down 2.6%. The company is currently trading a volume of 40,511 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. 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 assumption with high price/earnings stocks (generally of the growth variety) is that investors are willing to buy at a high price because they believe that the stock has significant growth potential, and the price/earnings to growth (PEG) ratio helps investors determine the degree of reliability of that growth assumption. DPM's PEG ratio is 0.99. 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.
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. 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 Utilities sector (XLU) is down 0.2% and its current biggest movers are:
| Company | Market Cap | Percentage Change |
| Huaneng Power International, Inc. (ADR) (NYSE:HNP) | $9.95 billion | -6.3% |
| Crestwood Midstream Partners LP (NYSE:CMLP) | $908.6 million | -4.4% |
| AES (NYSE:AES) | $9.4 billion | -4.3% |
| Clean Energy Fuels Corp. (Nasdaq:CLNE) | $1.21 billion | +4.2% |
| Inergy Midstream LP (NYSE:NRGM) | $1.73 billion | +3.7% |
| National Fuel Gas Co. (NYSE:NFG) | $4.11 billion | +2.6% |
| DCP Midstream Partners, LP (NYSE:DPM) | $2.27 billion | -2.6% |
Falling 6.3%, Huaneng Power International, Inc (NYSE:HNP) is currently at a share price of $26.54. So far today, the company's volume is 83,932 shares. This is 1.1 times the current daily average. In technical analysis, trading volume is used to determine the strength of a market indicator. Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. 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 HNP is 0.9%, which is on the low end. This could indicate that that the stock is overpriced or that future dividends might be higher. 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: Due Diligence On Dividends
Currently trading at $23.77 per share, Crestwood Midstream (NYSE:CMLP) has fallen 4.4%. This morning, 232,433 shares have been traded,. Volume is used to evaluate how meaningful the price movement of a stock is. Investment valuation ratios can be very useful in estimating whether a stock price is too high, reasonable or a bargain investment opportunity. 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 CMLP is a high 5.43. 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.
AES (NYSE:AES) is down 4.3% to reach $11.72 per share. So far today, 6.2 million shares have changed hands. 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. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the 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. AES has a debt ratio of 85.7%, which is on the high side. As such, the company is highly leveraged and not highly liquid. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.
Inergy (NYSE:NRGM) has risen 3.7% and is currently trading at $24.12 per share. The company's volume for the day so far is 37,773 shares. This is in keeping with its current daily average. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. 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 capitalization ratio is calculated by dividing long-term debt by the sum of long-term debt and shareholders' equity. NRGM has a low capitalization ratio of 12.7%. Low leverage is a significant balance sheet strength, a sign of a less risky investment. 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.
Increasing 2.6%, National Fuel (NYSE:NFG) is trading at $50.66 per share. At 238,366 shares, the company's volume so far today is which is likely to result in less activity than yesterday's volume of 801,222 shares. A stock's volume conveys how excited investors are about it. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. There are generally two price/earnings ratios calculated: the first, called the trailing Price/Earnings ratio, is calculated using the previous years actual earnings; the second, called forward Price/Earnings ratio, is calculated using the next year's estimated earnings. The P/E ratio for NFG is 19.4, above the industry average of 17.07. Generally speaking, the higher the P/E ratio, the higher the market expectations for a company's future performance. A high or low P/E ratio is not good or bad in and of itself, but a company trading with a high P/E ratio must continue to post strong financial performance or its stock price is likely to fall. SEE: How To Find P/E And PEG Ratios
DCP Midstream (NYSE:DPM) is trading at $42.50 per share, down 2.6%. The company is currently trading a volume of 40,511 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. 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 assumption with high price/earnings stocks (generally of the growth variety) is that investors are willing to buy at a high price because they believe that the stock has significant growth potential, and the price/earnings to growth (PEG) ratio helps investors determine the degree of reliability of that growth assumption. DPM's PEG ratio is 0.99. 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.
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. 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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