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Tickers in this Article: FSR, AFSI, SHG, ASPS, ING, VRTS, CI
The market has been slipping so far today. The Nasdaq has declined 0.9%; the S&P 500 has decreased 0.7%; and the Dow has fallen 0.7%. The financial sector is the category of stocks containing firms that provide financial services to commercial and retail customers. This sector includes banks, investment funds, insurance companies and real estate. Financial services perform best in low interest rate environments. A large portion of this sector generates revenue from mortgages and loans, which gain value as interest rates drop. Furthermore, when the business cycle is in an upswing, the financial sector benefits from additional investments. Improved economic conditions usually lead to more capital projects and increased personal investing. New projects require financing, which usually leads to a larger number of loans.

The Financial sector (XLF) is currently ahead of the overall market, down only 0.6%, and its biggest movers are currently:
CompanyMarket CapPercentage Change
Flagstone Reinsurance (NYSE:FSR)$501.7 million+19.1%
Amtrust Financial Services (Nasdaq:AFSI)$1.75 billion-9.1%
Shinhan Financial Group Co., Ltd (NYSE:SHG)$15.37 billion-3.8%
Altisource Portfolio Solutions (Nasdaq:ASPS)$2 billion-2.8%
ING Groep N.V (NYSE:ING)$27.51 billion+2.5%
Virtus Investment Partners (Nasdaq:VRTS)$690.5 million-2%
Cigna (NYSE:CI)$12.94 billion+1.8%
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Flagstone Reinsurance (NYSE:FSR) is trading at $8.41 per share, a significant rise of 19.1%. The company's volume for the morning is 4.7 million shares. This is 40.8 times its current daily average. If a stock price makes a big move up or down, volume lets us know the significance of that move. 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 easy-to-calculate debt ratio is helpful to investors looking for a quick take on the leverage for a company. FSR has a debt ratio of 67.5%, which is on the high side. This means that the company's cash flow is significantly impacted by paying off principal and interest and that any negative change in performance or rise in interest rates could result in default. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.

Amtrust Financial Services (Nasdaq:AFSI) is trading at $26.17 per share, down 9.1%. So far today, 84,769 shares have changed hands, with trading activity in keeping with yesterday's lighter than yesterday's volume of 182,332 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. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. A price/sales ratio is derived by dividing stock market price by company sales. The P/S ratio for AFSI is a high 1.15. 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.

Falling 3.8%, Shinhan Financial Group Co., Ltd (NYSE:SHG) is currently at a share price of $62.36. So far today, the company's volume is 15,614 shares. Volume is used to evaluate how meaningful the price movement of a stock is. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. 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 capitalization ratio for SHG is 71.1%, which is fairly high. A high capitalization ratio is not necessarily bad since higher financial leverage can increase the return on a shareholder's investment. A low level of debt and a healthy proportion of equity in a company's capital structure is an indication of financial fitness.

At $83.23, Altisource Portfolio Solutions (Nasdaq:ASPS) has slipped 2.8%. At 65,832 shares, the company's volume so far today is 0.4 times its average over the past three months. A stock's volume conveys how excited investors are about it. 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. 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). PEG ratio for ASPS is 1.11. Because of the adjustment for earnings growth rate, the PEG ratio is somewhat more useful than many formulas for comparing companies in different industries.

Rising 2.5%, ING Groep N.V (NYSE:ING) is currently trading at $7.36 per share. The company's volume for the day so far is 1.7 million shares. This is 0.7 times the current daily average. 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 price/book value ratio is calculated by dividing the current stock price by the company's book value per share. ING's stock is trading for less than its book value as can be seen from it's P/B value of 0.45. Industries that require more infrastructure capital (for each dollar of profit) will usually trade at P/B ratios much lower than those that don't. 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: Using The Price-To-Book Ratio To Evaluate Companies

Currently trading at $86.40 per share, Virtus Investment Partners (Nasdaq:VRTS) has fallen 2%. At 13,296 shares, the company's volume so far today is. 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 P/E ratio has been used for ages by analysts and still remains one of the most relevant pieces of stock valuation. VRTS' P/E ratio of 5.1 is under the industry average of 20.52. A low P/E might arise due to substantial inherent risk of the firm and its operations, poor return on equity, or improper valuation of the market. High P/E stocks could be "growth" stocks, while low PE stocks may be "value" stocks. SEE: The P/E Ratio: A Good Market-Timing Indicator

Cigna (NYSE:CI) has risen 1.8% to hit a current price of $45.68 per share. So far today, 975,134 shares have changed hands. If a stock price moves on high volume, this means that the change is a significant one. 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 debt ratio gives users a quick measure of the amount of debt that the company has on its balance sheets compared to its assets. CI's debt ratio of 83.2% is fairly high. As such, the company is highly leveraged and not highly liquid. 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.

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. However, these fundamental metrics must be analyzed with historic data, industry information in addition to firm specific financial statements.

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