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Huaneng Power International, Inc and Other Utilities Stocks Making Big Moves on September 17, 2012
This morning's trading has marked a bad day for the market so far. The Nasdaq has fallen 0.2%; the S&P 500 is down 0.2%; and the Dow has decreased 0.2%. 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.
The Utilities sector (XLU) is currently lagging behind the overall market, down 0.4%, and its current biggest movers are:
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Currently trading at $74.68 per share, Companhia de Saneamento Basico (NYSE:SBS) has fallen 4.5%. The company is currently trading a volume of 327,545 shares. Volume indicates the level of interest that investors have in a company at its current price. 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 debt ratio shows the proportion of assets that a company is financing through debt. SBS' debt ratio is 56.4%. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.
Atlas (NYSE:ATLS) is up 1.8% to reach a current price of $36.42 per share. The company's volume is currently 33,448 shares for the day, while it was 213,740 shares yesterday. Volume is used to evaluate how meaningful the price movement of a stock is. 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. ATLS' stock is trading for more than its book value with a P/B ratio of 4.06. 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. 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
At $34.52, Brookfield Infrastructure Partners (NYSE:BIP) has slipped 1.6%. The company is currently trading a volume of 132,640 shares. This is 0.6 times the current three-month average. Volume is an important indicator because it indicates how significant a price shift is. 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 dividend yield is calculated by dividing a company's dividends per share by its stock price. BIP's dividend yield is 4.3%. To calculate the dividend yield, divide the level of dividends by the stock price; the higher the yield, the more attractive the security. SEE: Investment Valuation Ratios: Dividend Yield
Falling 1.6%, UIL (NYSE:UIL) is currently at a share price of $35.20. The company's volume is currently 59,948 shares for the day, 0.3 times the average daily volume. A stock's volume conveys how excited investors are about it. Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. 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. UIL has a high P/S ratio of 1.26. This could be a good sign if the share price increases. 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.
After rising 1.5%, Exterran Partners (Nasdaq:EXLP) is currently trading at a share price of $21.65. So far today, 39,307 shares have changed hands. 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. 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 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. EXLP's capitalization ratio of 58.3% is relatively high. A company considered too highly leveraged (too much debt) may find its freedom of action restricted by its creditors and/or have its profitability hurt by high interest costs. Prudent use of leverage (debt) increases the financial resources available to a company for growth and expansion.
Huaneng Power International, Inc (NYSE:HNP) is down 1.5% to reach $27.32 per share. This morning, 30,686 shares have been traded, lighter than yesterday's volume of 126,454 shares. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. Valuation ratios allow the investor to make a quick determination as to a company's investment value. The debt ratio is calculated by dividing total liabilities by total assets. HNP has a debt ratio of 80.1%, which is on the high side. This might mean that the company now has low borrowing capacity, which reduces it's financial flexibility. 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.
National Fuel (NYSE:NFG) has fallen 1.2% and is currently trading at $53.86 per share. The company's volume for the day so far is 41,515 shares. This is 0.2 times its average volume over the past three months. 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. 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 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. NFG has a PEG ratio of 31.0. 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. However, these fundamental metrics must be analyzed with historic data, industry information in addition to firm specific financial statements.
The Utilities sector (XLU) is currently lagging behind the overall market, down 0.4%, and its current biggest movers are:
| Company | Market Cap | Percentage Change |
| Companhia de Saneamento Basico (NYSE:SBS) | $8.91 billion | -4.5% |
| Atlas (NYSE:ATLS) | $1.84 billion | +1.8% |
| Brookfield Infrastructure Partners (NYSE:BIP) | $5.04 billion | -1.6% |
| UIL (NYSE:UIL) | $1.81 billion | -1.6% |
| Exterran Partners (Nasdaq:EXLP) | $901.5 million | +1.5% |
| Huaneng Power International, Inc (NYSE:HNP) | $9.74 billion | -1.5% |
| National Fuel (NYSE:NFG) | $4.54 billion | -1.2% |
Currently trading at $74.68 per share, Companhia de Saneamento Basico (NYSE:SBS) has fallen 4.5%. The company is currently trading a volume of 327,545 shares. Volume indicates the level of interest that investors have in a company at its current price. 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 debt ratio shows the proportion of assets that a company is financing through debt. SBS' debt ratio is 56.4%. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.
Atlas (NYSE:ATLS) is up 1.8% to reach a current price of $36.42 per share. The company's volume is currently 33,448 shares for the day, while it was 213,740 shares yesterday. Volume is used to evaluate how meaningful the price movement of a stock is. 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. ATLS' stock is trading for more than its book value with a P/B ratio of 4.06. 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. 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
At $34.52, Brookfield Infrastructure Partners (NYSE:BIP) has slipped 1.6%. The company is currently trading a volume of 132,640 shares. This is 0.6 times the current three-month average. Volume is an important indicator because it indicates how significant a price shift is. 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 dividend yield is calculated by dividing a company's dividends per share by its stock price. BIP's dividend yield is 4.3%. To calculate the dividend yield, divide the level of dividends by the stock price; the higher the yield, the more attractive the security. SEE: Investment Valuation Ratios: Dividend Yield
Falling 1.6%, UIL (NYSE:UIL) is currently at a share price of $35.20. The company's volume is currently 59,948 shares for the day, 0.3 times the average daily volume. A stock's volume conveys how excited investors are about it. Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. 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. UIL has a high P/S ratio of 1.26. This could be a good sign if the share price increases. 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.
After rising 1.5%, Exterran Partners (Nasdaq:EXLP) is currently trading at a share price of $21.65. So far today, 39,307 shares have changed hands. 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. 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 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. EXLP's capitalization ratio of 58.3% is relatively high. A company considered too highly leveraged (too much debt) may find its freedom of action restricted by its creditors and/or have its profitability hurt by high interest costs. Prudent use of leverage (debt) increases the financial resources available to a company for growth and expansion.
Huaneng Power International, Inc (NYSE:HNP) is down 1.5% to reach $27.32 per share. This morning, 30,686 shares have been traded, lighter than yesterday's volume of 126,454 shares. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. Valuation ratios allow the investor to make a quick determination as to a company's investment value. The debt ratio is calculated by dividing total liabilities by total assets. HNP has a debt ratio of 80.1%, which is on the high side. This might mean that the company now has low borrowing capacity, which reduces it's financial flexibility. 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.
National Fuel (NYSE:NFG) has fallen 1.2% and is currently trading at $53.86 per share. The company's volume for the day so far is 41,515 shares. This is 0.2 times its average volume over the past three months. 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. 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 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. NFG has a PEG ratio of 31.0. 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. However, these fundamental metrics must be analyzed with historic data, industry information in addition to firm specific financial statements.
by
Investopedia Staff
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