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NextEra Energy Among Utilities' Biggest Movers on August 27, 2012
The Nasdaq is up 0.5%, the S&P 500 is up 0.3% and the Dow has climbed 0.1%, marking a bad morning for the market. 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 up 0.2%, underperforming the market overall. The biggest movers in the sector are currently:
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Companhia Paranaense de Energia (NYSE:ELP) is trading at $19.06 per share, down 4.4%. The company's volume is currently 274,156 shares. In technical analysis, trading volume is used to determine the strength of a market indicator. 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. 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. ELP's stock is trading for less than its book value as can be seen from it's P/B value of 0.78. 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. 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
Black (NYSE:BKH) has moved up 1.6% and is currently trading at $33.94 per share. So far today, the company's volume is 339,667 shares. Volume is an important indicator because it indicates how significant a price shift is. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. A company's price/earnings ratio (P/E ratio) provides a measure of how expensive or cheap a stock is. The P/E ratio for BKH is 45.8, above the industry average of 8.93. Generally speaking, the higher the P/E ratio, the higher the market expectations for a company's future performance. A high P/E ratio indicates a stock that is expensive, while a low P/E ratio indicates a stock that is cheap. SEE: How To Find P/E And PEG Ratios
Increasing 1.5%, American States (NYSE:AWR) is trading at $44.02 per share. With 29,113 shares changing hands so far today, the company's volume is 0.2 times the average volume over the last three months. Volume is used to evaluate how meaningful the price movement of a stock is. Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. The dividend yield is measured by taking the annual dividends per share and dividing that number by the stock price. AWR's dividend yield is 3.3%. It is important to remember that dividends are only one component of a stock's return and capital appreciation (or decline) must also be considered when evaluating a security. SEE: Guide To Stock-Picking Strategies: Income Investing
National Fuel (NYSE:NFG) is up 1.1% to reach a current price of $50.52 per share. The company's volume for the day so far is 83,577 shares. This is 0.2 times its average daily volume. When a stock price moves up or down, watching the volume is a good way of identifying how significant that shift is. Valuation ratios allow the investor to make a quick determination as to a company's investment value. The price/sales ratio measures a company's stock market value by its total revenues or alternatively, a company's price per share by its revenue per share. The P/S ratio for NFG is 2.45, which is relatively high. 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.
Covanta (NYSE:CVA) has decreased to $17.28 per share, a 1% fall. So far today, 125,336 shares have changed hands, on pace to finish the day below yesterday's volume of 374,124 shares. A stock's volume conveys how excited investors are about it. 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 is calculated by dividing total liabilities by total assets. The debt ratio for CVA is 77.2%, which is relatively high. 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.
NextEra Energy (NYSE:NEE) is at $68.50 per share after an increase of 1%. This morning, the company is trading a volume of 475,193 shares. High volume indicates a lot of investor interest while low volume indicates the opposite. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. The debt-equity (D/E) ratio is a leverage ratio. NEE's D/E ratio of 157% is on the high side. Companies with high D/E ratios may have difficulty attracting additional investment capital. The D/E ratio is not a pure measurement of a company's debt because it includes operational liabilities in total liabilities.
ALLETE (NYSE:ALE) is currently trading at $41.16 per share, a 0.9% increase. So far today, the company's volume is 31,212 shares, 0.2 times the current three-month average. If a stock price moves on high volume, this means that the change is a significant one. 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. 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. ALE has a capitalization ratio of 41.9%. 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.
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. However, these fundamental metrics must be analyzed with historic data, industry information in addition to firm specific financial statements.
The Utilities sector (XLU) is up 0.2%, underperforming the market overall. The biggest movers in the sector are currently:
| Company | Market Cap | Percentage Change |
| Companhia Paranaense de Energia (NYSE:ELP) | $5.45 billion | -4.4% |
| Black (NYSE:BKH) | $1.48 billion | +1.6% |
| American States (NYSE:AWR) | $820.7 million | +1.5% |
| National Fuel (NYSE:NFG) | $4.16 billion | +1.1% |
| Covanta (NYSE:CVA) | $2.32 billion | -1% |
| NextEra Energy (NYSE:NEE) | $28.68 billion | +1% |
| ALLETE (NYSE:ALE) | $1.56 billion | +0.9% |
Companhia Paranaense de Energia (NYSE:ELP) is trading at $19.06 per share, down 4.4%. The company's volume is currently 274,156 shares. In technical analysis, trading volume is used to determine the strength of a market indicator. 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. 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. ELP's stock is trading for less than its book value as can be seen from it's P/B value of 0.78. 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. 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
Black (NYSE:BKH) has moved up 1.6% and is currently trading at $33.94 per share. So far today, the company's volume is 339,667 shares. Volume is an important indicator because it indicates how significant a price shift is. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. A company's price/earnings ratio (P/E ratio) provides a measure of how expensive or cheap a stock is. The P/E ratio for BKH is 45.8, above the industry average of 8.93. Generally speaking, the higher the P/E ratio, the higher the market expectations for a company's future performance. A high P/E ratio indicates a stock that is expensive, while a low P/E ratio indicates a stock that is cheap. SEE: How To Find P/E And PEG Ratios
Increasing 1.5%, American States (NYSE:AWR) is trading at $44.02 per share. With 29,113 shares changing hands so far today, the company's volume is 0.2 times the average volume over the last three months. Volume is used to evaluate how meaningful the price movement of a stock is. Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. The dividend yield is measured by taking the annual dividends per share and dividing that number by the stock price. AWR's dividend yield is 3.3%. It is important to remember that dividends are only one component of a stock's return and capital appreciation (or decline) must also be considered when evaluating a security. SEE: Guide To Stock-Picking Strategies: Income Investing
National Fuel (NYSE:NFG) is up 1.1% to reach a current price of $50.52 per share. The company's volume for the day so far is 83,577 shares. This is 0.2 times its average daily volume. When a stock price moves up or down, watching the volume is a good way of identifying how significant that shift is. Valuation ratios allow the investor to make a quick determination as to a company's investment value. The price/sales ratio measures a company's stock market value by its total revenues or alternatively, a company's price per share by its revenue per share. The P/S ratio for NFG is 2.45, which is relatively high. 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.
Covanta (NYSE:CVA) has decreased to $17.28 per share, a 1% fall. So far today, 125,336 shares have changed hands, on pace to finish the day below yesterday's volume of 374,124 shares. A stock's volume conveys how excited investors are about it. 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 is calculated by dividing total liabilities by total assets. The debt ratio for CVA is 77.2%, which is relatively high. 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.
NextEra Energy (NYSE:NEE) is at $68.50 per share after an increase of 1%. This morning, the company is trading a volume of 475,193 shares. High volume indicates a lot of investor interest while low volume indicates the opposite. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. The debt-equity (D/E) ratio is a leverage ratio. NEE's D/E ratio of 157% is on the high side. Companies with high D/E ratios may have difficulty attracting additional investment capital. The D/E ratio is not a pure measurement of a company's debt because it includes operational liabilities in total liabilities.
ALLETE (NYSE:ALE) is currently trading at $41.16 per share, a 0.9% increase. So far today, the company's volume is 31,212 shares, 0.2 times the current three-month average. If a stock price moves on high volume, this means that the change is a significant one. 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. 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. ALE has a capitalization ratio of 41.9%. 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.
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. 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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