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Tickers in this Article: DLLR, FII, TCAP, AB, MAIN, SLV, FLT
The market is currently down, with the Nasdaq slipping 0.2%, the S&P 500 down 0.4% and the Dow decreasing 0.6%. 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 down 0.5%, underperforming the market overall. The current biggest movers in the sector are:
CompanyMarket CapPercentage Change
DFC (Nasdaq:DLLR)$875.8 million-8.7%
Federated Investors Inc (NYSE:FII)$2.15 billion+4.5%
Triangle (NYSE:TCAP)$657.1 million-4.2%
AllianceBernstein (NYSE:AB)$1.35 billion+4.1%
Main Street (NYSE:MAIN)$831.2 million-4.1%
iShares Silver Trust (NYSE:SLV)$9.34 billion+3.1%
FleetCor Technologies (NYSE:FLT)$3.61 billion-2.2%
Investopedia Markets: Explore the best one-stop source for financial news

Falling 8.7%, DFC (Nasdaq:DLLR) is currently at a share price of $18.18. This morning, the company is trading a volume of 765,921 shares. A stock's volume conveys how excited investors are about it. Understanding investment valuation ratios allows an investor to assess the true value of an individual stock. The debt ratio shows the proportion of assets that a company is financing through debt. DLLR has a high debt ratio of 72.4%. 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.

Federated Investors Inc (NYSE:FII) is up 4.5% to reach a current price of $21.54 per share. So far today, the company's volume is 1.9 million shares, which is more trading activity than there was yesterday. If a stock price makes a big move up or down, volume lets us know the significance of that move. Looking at a company's valuation ratios is a good way of getting a basic idea as to its value as an investment. The price/sales ratio measures a company's stock market price by its revenues. FII's P/S ratio of 2.53 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. 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.

Triangle (NYSE:TCAP) is down 4.2% to reach $23.06 per share. The company's volume for the day so far is 331,326 shares. This is 1.5 times its average volume over the past three months. 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. TCAP has a capitalization ratio of 40.5%. The capitalization ratio is one of the more meaningful debt ratios because it focuses on the relationship of debt liabilities as a component of a company's total capital base, which is the capital raised by shareholders and lenders.

AllianceBernstein (NYSE:AB) is at $13.34 per share after an increase of 4.1%. The company's volume is currently 322,036 shares for the day, 0.9 times its current daily average. 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. One of the favorite tools of many value investors is analyzing price/book value ratios, as it provides a measure of the underlying value of a company's assets as compared to the valuation of its equity. AB's P/B ratio of 0.85 indicates that its share price is lower than its book value. This is due to one of two possibilities: that the stock is being unfairly or incorrectly undervalued by investors because of some transitory circumstance and represents an attractive buying opportunity at a bargain price or that the market's low opinion and valuation of the company are correct, at least over the foreseeable future. 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: Using The Price-To-Book Ratio To Evaluate Companies

At $25.27, Main Street (NYSE:MAIN) has slipped 4.1%. The company's volume for the day so far is 369,280 shares. When a stock price moves up or down, watching the volume is a good way of identifying how significant that shift 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. Dividend yield measures the income that a stock will generate for an investor. Dividend yield for MAIN is 6.8%. High dividend yields are generally more important to value investors, investors in larger companies, and income oriented investors than they are to growth investors, investors in small cap stocks, and investors in new or emerging companies. SEE: Investment Valuation Ratios: Dividend Yield

iShares Silver Trust (NYSE:SLV) has risen 3.1% to hit a current price of $29.82 per share. At 12.7 million shares, the company's volume so far today is. 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.

FleetCor Technologies (NYSE:FLT) is trading at $42.22 per share, down 2.2%. This morning, the company is trading a volume of 173,627 shares. This is 0.2 times the average volume over the last three months. If a stock price moves on high volume, this means that the change is a significant one. 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-equity (D/E) ratio compares the total liabilities for a company to its total shareholder equity. The D/E ratio for FLT is 79%. The D/E ratio percentage provides a much more dramatic perspective on a company's leverage position than the debt ratio percentage.

The Bottom Line The nature of the market is such that stocks will have good days and bad days. 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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