Filed Under: ,
Tickers in this Article: ASMI, LLTC, MU, VSH, PSMI, BRKS, MFLX
The morning has been good for the market. The Nasdaq is up 0.6%; the S&P 500 has moved up 0.8%; and the Dow has climbed 1.1%.

Outperforming the market overall, the Semiconductors sector (XLK) is up 0.6% and its biggest movers so far today are:
CompanyMarket CapPercentage Change
ASM International (Nasdaq:ASMI)$1.86 billion+3.5%
Linear Technology (Nasdaq:LLTC)$7.49 billion+3.4%
Micron (Nasdaq:MU)$6.08 billion-2.8%
Vishay (NYSE:VSH)$1.41 billion-2.7%
Peregrine Semiconductor Corp (Nasdaq:PSMI)$531.8 million-2.3%
Brooks Automation (Nasdaq:BRKS)$532.2 million-2.2%
Multi-Fineline Electronix (Nasdaq:MFLX)$535.8 million+2.1%
Beginner's Guide To

ASM International (Nasdaq:ASMI) has increased to a share price of $34.98, a 3.5% rise. The company's volume is currently 7,391 shares for the day, 0.8 times its average over the past three months. 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. 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 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 ASMI is 1.16, which is relatively high. In young companies, a high P/S ratio is a sign of sales growth that is expected to turn into earnings and cash flow. All things being equal, a low P/S ratio is good news for investors, while a very high one can be a warning sign.

Linear Technology (Nasdaq:LLTC) has moved up 3.4% and is currently trading at $32.89 per share. The company is trading at a volume of 2.9 million shares. This is more trading activity than there was yesterday. In technical analysis, trading volume is used to determine the strength of a market indicator. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. The debt ratio shows the proportion of assets that a company is financing through debt. LLTC has a debt ratio of 60.2%, which is on the high side. This means that most of the company's assets are financed through debt. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.

Micron (Nasdaq:MU) has decreased to $5.81 per share, a 2.8% fall. So far today, the company's volume is 15.6 million shares, consistent with its current daily average. If a stock price moves on high volume, this means that the change is a significant one. Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. The debt-equity (D/E) ratio is a leverage ratio. The debt-equity ratio of 42% is relatively low. Companies with low D/E ratios are more attractive to investors because they are better able to protect their business interests in times of decline. The D/E ratio percentage provides a much more dramatic perspective on a company's leverage position than the debt ratio percentage.

Slipping 2.7%, Vishay (NYSE:VSH) is currently trading at $9.56 per share. The company's volume for the day so far is 883,270 shares. 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. Looking at a company's valuation ratios is a good way of getting a basic idea as to its value as an investment. The capitalization ratio is calculated by dividing long-term debt by the sum of long-term debt and shareholders' equity. VSH has a fairly low capitalization ratio of 22.7%. Investors generally consider a company with low debt and high equity levels is a good quality investment. Prudent use of leverage (debt) increases the financial resources available to a company for growth and expansion.

Falling 2.3%, Peregrine Semiconductor Corp (Nasdaq:PSMI) is currently at a share price of $16.55. The company's volume for the day so far is 23,887 shares, 0.1 times its current three-month average. Volume is an important indicator because it indicates how significant a price shift is.

Brooks Automation (Nasdaq:BRKS) is down 2.2% to reach $7.86 per share. So far today, the company's volume is 320,768 shares. 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. If the price/book value ratio of a stock is high, it may indicate that the stock is expensive, while a lower ratio may indicate that the stock is a bargain. BRKS' stock is trading for less than its book value as can be seen from it's P/B value of 0.99. 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: Investment Valuation Ratios: Price/Book Value Ratio

Multi-Fineline Electronix (Nasdaq:MFLX) has moved up 2.1% and is currently trading at $23.02 per share. So far today, the company's volume is 10,700 shares, 0.3 times its current daily average. Volume is used to evaluate how meaningful the price movement of a stock is. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. The price/sales ratio measures a company's stock market price by its revenues. MFLX has a P/S ratio of 0.72, on the low end. A company with a lower P/S ratio is generally considered more attractive, since investors are paying less for each dollar of sales. 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.

The Bottom Line No matter the economic climate, Wall Street will always have stocks that make major moves each week. It is important to weigh current activity against historical performance when making any investment decisions. Keep in mind that all these ratios should be compared against historical numbers and industry information in order to get a more complete picture.

comments powered by Disqus

Trading Center