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Marathon and More Big Movers in Oil and Gas Operations on September 19, 2012
The market has been doing well after the morning's trading. The Nasdaq has increased 0.1%; the S&P 500 has risen 0.2%; and the Dow is trading up 0.3%.
Despite a good day for the overall market so far, the Oil and Gas Operations sector (DIG) is down 0.9% and its current biggest movers are:
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At $31.13, PDC Energy (Nasdaq:PDCE) has slipped 5.4%. The company's volume for the day so far is 679,248 shares. When a stock price moves up or down, watching the volume is a good way of identifying how significant that shift is. Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. The debt ratio is calculated by dividing total liabilities by total assets. The debt ratio for PDCE is 55.2%. 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.
Clayton Williams Energy (Nasdaq:CWEI) has decreased to $56 per share, a 4.7% fall. The company's volume is currently 23,587 shares for the day, in line with the current daily average. 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 estimating whether a stock price is too high, reasonable or a bargain investment opportunity. The debt-equity (D/E) ratio is a leverage ratio. The D/E ratio for CWEI is 182%. Generally, a high D/E ratio means that the company may have difficulty generating enough cash to pay off its debts. This easy-to-calculate ratio provides a general indication of a company's equity-liability relationship and is helpful to investors looking for a quick take on a company's leverage.
Approach Resources (Nasdaq:AREX) has fallen 3.3% and is currently trading at $31.57 per share. The company is trading at a volume of 289,700 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. 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 AREX is a high 7.15. In young companies, a high P/S ratio is a sign of sales growth that is expected to turn into earnings and cash flow. 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.
After a decline of 3%, Berry Petroleum (NYSE:BRY) has hit a share price of $40.14. So far today, the company's volume is 377,723 shares, 0.7 times its current three-month average. If a stock price moves on high volume, this means that the change is a significant one. Understanding investment valuation ratios allows an investor to assess the true value of an individual stock. A company's capitalization (not to be confused with its market capitalization) is the term used to describe the makeup of a company's permanent or long-term capital, which consists of both long-term debt and shareholders' equity. The capitalization ratio for BRY is 61%, which is fairly high. If the company is a company is in a highly competitive business and hobbled by high debt, it will find its competitors taking advantage of its problems to grab more market share. A low level of debt and a healthy proportion of equity in a company's capital structure is an indication of financial fitness.
Laredo Petroleum Holdings (NYSE:LPI) is trading at $21.95 per share, down 2.8%. The company is currently trading a volume of 44,950 shares. In technical analysis, trading volume is used to determine the strength of a market indicator. 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/book value ratio is calculated by dividing the current stock price by the company's book value per share. LPI's stock is trading for more than its book value with a P/B ratio of 3.42. This implies that investors expect management to create more value from a given set of assets and/or that the market value of the firm's assets is significantly higher than their accounting value. 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: How Buybacks Warps The Price-To-Book Ratio
After rising 2.5%, InterOil Corporation (NYSE:IOC) is currently trading at a share price of $87.27. The company's volume is currently 652,172 shares for the day, 0.7 times the average daily volume. The trading volume for a stock indicates the level of investor interest. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. The debt ratio shows the proportion of assets that a company is financing through debt. IOC's debt ratio of 35.6% is on the low side. In other words, the company is less sensitive to changes in business or interest rates since less of its cash flow is dedicated to paying off loan expenses. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.
Marathon (NYSE:MPC) is at $53.33 per share after an increase of 2.4%. The company's volume is currently 1.3 million shares. This is a sign that there will be less trading activity than there was yesterday. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. 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. The price/sales ratio is used for spotting recovery situations or for double-checking that a company's growth has not become overvalued. MPC has a low P/S ratio of 0.19. The lower the P/S ratio, the more reasonably price the stock, all else being equal. 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 The nature of the market is such that stocks will have good days and bad days. Daily stock performance should be weighed against historical performance and put in context of the market overall. Keep in mind that all these ratios should be compared against historical numbers and industry information in order to get a more complete picture.
Despite a good day for the overall market so far, the Oil and Gas Operations sector (DIG) is down 0.9% and its current biggest movers are:
| Company | Market Cap | Percentage Change |
| PDC Energy (Nasdaq:PDCE) | $996.1 million | -5.4% |
| Clayton Williams Energy (Nasdaq:CWEI) | $714.7 million | -4.7% |
| Approach Resources (Nasdaq:AREX) | $1.09 billion | -3.3% |
| Berry Petroleum (NYSE:BRY) | $2.24 billion | -3% |
| Laredo Petroleum Holdings (NYSE:LPI) | $2.9 billion | -2.8% |
| InterOil Corporation (NYSE:IOC) | $4.12 billion | +2.5% |
| Marathon (NYSE:MPC) | $17.62 billion | +2.4% |
At $31.13, PDC Energy (Nasdaq:PDCE) has slipped 5.4%. The company's volume for the day so far is 679,248 shares. When a stock price moves up or down, watching the volume is a good way of identifying how significant that shift is. Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. The debt ratio is calculated by dividing total liabilities by total assets. The debt ratio for PDCE is 55.2%. 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.
Clayton Williams Energy (Nasdaq:CWEI) has decreased to $56 per share, a 4.7% fall. The company's volume is currently 23,587 shares for the day, in line with the current daily average. 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 estimating whether a stock price is too high, reasonable or a bargain investment opportunity. The debt-equity (D/E) ratio is a leverage ratio. The D/E ratio for CWEI is 182%. Generally, a high D/E ratio means that the company may have difficulty generating enough cash to pay off its debts. This easy-to-calculate ratio provides a general indication of a company's equity-liability relationship and is helpful to investors looking for a quick take on a company's leverage.
Approach Resources (Nasdaq:AREX) has fallen 3.3% and is currently trading at $31.57 per share. The company is trading at a volume of 289,700 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. 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 AREX is a high 7.15. In young companies, a high P/S ratio is a sign of sales growth that is expected to turn into earnings and cash flow. 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.
After a decline of 3%, Berry Petroleum (NYSE:BRY) has hit a share price of $40.14. So far today, the company's volume is 377,723 shares, 0.7 times its current three-month average. If a stock price moves on high volume, this means that the change is a significant one. Understanding investment valuation ratios allows an investor to assess the true value of an individual stock. A company's capitalization (not to be confused with its market capitalization) is the term used to describe the makeup of a company's permanent or long-term capital, which consists of both long-term debt and shareholders' equity. The capitalization ratio for BRY is 61%, which is fairly high. If the company is a company is in a highly competitive business and hobbled by high debt, it will find its competitors taking advantage of its problems to grab more market share. A low level of debt and a healthy proportion of equity in a company's capital structure is an indication of financial fitness.
Laredo Petroleum Holdings (NYSE:LPI) is trading at $21.95 per share, down 2.8%. The company is currently trading a volume of 44,950 shares. In technical analysis, trading volume is used to determine the strength of a market indicator. 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/book value ratio is calculated by dividing the current stock price by the company's book value per share. LPI's stock is trading for more than its book value with a P/B ratio of 3.42. This implies that investors expect management to create more value from a given set of assets and/or that the market value of the firm's assets is significantly higher than their accounting value. 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: How Buybacks Warps The Price-To-Book Ratio
After rising 2.5%, InterOil Corporation (NYSE:IOC) is currently trading at a share price of $87.27. The company's volume is currently 652,172 shares for the day, 0.7 times the average daily volume. The trading volume for a stock indicates the level of investor interest. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. The debt ratio shows the proportion of assets that a company is financing through debt. IOC's debt ratio of 35.6% is on the low side. In other words, the company is less sensitive to changes in business or interest rates since less of its cash flow is dedicated to paying off loan expenses. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.
Marathon (NYSE:MPC) is at $53.33 per share after an increase of 2.4%. The company's volume is currently 1.3 million shares. This is a sign that there will be less trading activity than there was yesterday. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. 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. The price/sales ratio is used for spotting recovery situations or for double-checking that a company's growth has not become overvalued. MPC has a low P/S ratio of 0.19. The lower the P/S ratio, the more reasonably price the stock, all else being equal. 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 The nature of the market is such that stocks will have good days and bad days. Daily stock performance should be weighed against historical performance and put in context of the market overall. Keep in mind that all these ratios should be compared against historical numbers and industry information in order to get a more complete picture.
by
Investopedia Staff
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