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NXP and Other Big Movers In Semiconductors on September 10, 2012
So far today, the Nasdaq has decreased 0.6%, the S&P 500 is unchanged and the Dow has increased 0.1%.
These are the biggest movers in the Semiconductors sector (XLK) (+0.3%):
Broker Summary: E-Trade Financial
After a big jump of 11.3%, GT Advanced Technologies (Nasdaq:GTAT) is trading at $6.71 per share. The company's volume is currently 3.2 million shares for the day, 1.1 times its current three-month average. High volume indicates a lot of investor interest while low volume indicates the opposite. 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. To a large degree, the debt-equity (D/E) ratio provides another vantage point on a company's leverage position, in this case, comparing total liabilities to shareholders' equity, as opposed to total assets in the debt ratio. GTAT's debt-equity ratio of 42% is on the low end. A low D/E ratio may be a sign that the company is not taking advantage of leverage to increase its profits. The D/E ratio percentage provides a much more dramatic perspective on a company's leverage position than the debt ratio percentage.
Mellanox (Nasdaq:MLNX) is currently trading at $98.35 per share, after a steep drop of 11.3%. So far today, the company's volume is 4.1 million shares. This is more trading activity than there was yesterday. Volume indicates the level of interest that investors have in a company at its current price. Understanding investment valuation ratios allows an investor to assess the true value of an individual stock. When used consistently and uniformly, the price/earnings to growth (PEG) ratio is an essential tool that adds dimension to the price/earnings ratio, allows comparisons across diverse industries and is always on the lookout for value. MLNX has a PEG ratio of 3.46. Because of the adjustment for earnings growth rate, the PEG ratio is somewhat more useful than many formulas for comparing companies in different industries.
NXP (Nasdaq:NXPI) is trading at $23.59 per share, down 5%. The company's volume is currently 570,295 shares for the day, 0.3 times the average daily volume. 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 like 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 are useful in determining how attractive a potential or existing investment is. The price/book value ratio is especially important for value investors as it can provide an indication of the true value of a company's assets at a time when its business model may be failing. NXPI's P/B ratio of 5.84 shows that its share price is higher than its book value. 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: Investment Valuation Ratios: Price/Book Value Ratio
At $14.54, Advantest Corp (NYSE:ATE) has slipped 4.9%. So far today, 2,000 shares have changed hands. Volume is an important indicator in technical analysis as it is used to measure the worth of a market move. If the markets have made a strong price move either up or down the perceived strength of that move depends on the volume for that period. The higher the volume during that price move the more significant the move. Looking at a company's valuation ratios is a good way of getting a basic idea as to its value as an investment. 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. ATE's P/S ratio of 1.53 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. 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 4.1%, Spreadtrum Communications, Inc (Nasdaq:SPRD) has hit a share price of $20.88. So far today, the company's volume is 1.5 million shares, 1.5 times the current three-month 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. Investment valuation ratios can be very useful in estimating whether a stock price is too high, reasonable or a bargain investment opportunity. 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. SPRD has a debt ratio of 43.8%, which is fairly low. 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.
PMC-Sierra (Nasdaq:PMCS) has risen 4% and is currently trading at $6.41 per share. The company is trading at a volume of 1.8 million 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. 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 debt-equity (D/E) ratio compares the total liabilities for a company to its total shareholder equity. PMCS has a debt-equity ratio of 8%, which is on the low side. This shows that the company's assets are financed primarily through equity. 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.
Slipping 4%, Cirrus Logic (Nasdaq:CRUS) is currently trading at $42.59 per share. So far today, the company's volume is 1.3 million shares, in keeping with its current daily average. If a stock price moves on high volume, this means that the change is a significant one. Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. 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). CRUS has a PEG ratio of 2.01, which is consistent with the industry average. While P/E ratios are important indicators of market value, a high P/E in and of itself is not bad because it may indicate a company whose earnings are growing very rapidly, so many investors look at the PEG ratio in order to get an idea of whether or not a particular P/E ratio is justified by underlying earnings growth.
The Bottom Line On any given day, a particular stock may see positive or negative change in its share price. Paying close attention to the previous ratios will help you identify key times to adjust your strategy. Keep in mind that all these ratios should be compared against historical numbers and industry information in order to get a more complete picture.
These are the biggest movers in the Semiconductors sector (XLK) (+0.3%):
| Company | Market Cap | Percentage Change |
| GT Advanced Technologies (Nasdaq:GTAT) | $715.6 million | +11.3% |
| Mellanox (Nasdaq:MLNX) | $4.61 billion | -11.3% |
| NXP (Nasdaq:NXPI) | $6.25 billion | -5% |
| Advantest Corp (NYSE:ATE) | $2.65 billion | -4.9% |
| Spreadtrum Communications, Inc (Nasdaq:SPRD) | $1.02 billion | -4.1% |
| PMC-Sierra (Nasdaq:PMCS) | $1.28 billion | +4% |
| Cirrus Logic (Nasdaq:CRUS) | $2.86 billion | -4% |
After a big jump of 11.3%, GT Advanced Technologies (Nasdaq:GTAT) is trading at $6.71 per share. The company's volume is currently 3.2 million shares for the day, 1.1 times its current three-month average. High volume indicates a lot of investor interest while low volume indicates the opposite. 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. To a large degree, the debt-equity (D/E) ratio provides another vantage point on a company's leverage position, in this case, comparing total liabilities to shareholders' equity, as opposed to total assets in the debt ratio. GTAT's debt-equity ratio of 42% is on the low end. A low D/E ratio may be a sign that the company is not taking advantage of leverage to increase its profits. The D/E ratio percentage provides a much more dramatic perspective on a company's leverage position than the debt ratio percentage.
Mellanox (Nasdaq:MLNX) is currently trading at $98.35 per share, after a steep drop of 11.3%. So far today, the company's volume is 4.1 million shares. This is more trading activity than there was yesterday. Volume indicates the level of interest that investors have in a company at its current price. Understanding investment valuation ratios allows an investor to assess the true value of an individual stock. When used consistently and uniformly, the price/earnings to growth (PEG) ratio is an essential tool that adds dimension to the price/earnings ratio, allows comparisons across diverse industries and is always on the lookout for value. MLNX has a PEG ratio of 3.46. Because of the adjustment for earnings growth rate, the PEG ratio is somewhat more useful than many formulas for comparing companies in different industries.
NXP (Nasdaq:NXPI) is trading at $23.59 per share, down 5%. The company's volume is currently 570,295 shares for the day, 0.3 times the average daily volume. 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 like 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 are useful in determining how attractive a potential or existing investment is. The price/book value ratio is especially important for value investors as it can provide an indication of the true value of a company's assets at a time when its business model may be failing. NXPI's P/B ratio of 5.84 shows that its share price is higher than its book value. 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: Investment Valuation Ratios: Price/Book Value Ratio
After a decline of 4.1%, Spreadtrum Communications, Inc (Nasdaq:SPRD) has hit a share price of $20.88. So far today, the company's volume is 1.5 million shares, 1.5 times the current three-month 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. Investment valuation ratios can be very useful in estimating whether a stock price is too high, reasonable or a bargain investment opportunity. 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. SPRD has a debt ratio of 43.8%, which is fairly low. 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.
PMC-Sierra (Nasdaq:PMCS) has risen 4% and is currently trading at $6.41 per share. The company is trading at a volume of 1.8 million 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. 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 debt-equity (D/E) ratio compares the total liabilities for a company to its total shareholder equity. PMCS has a debt-equity ratio of 8%, which is on the low side. This shows that the company's assets are financed primarily through equity. 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.
Slipping 4%, Cirrus Logic (Nasdaq:CRUS) is currently trading at $42.59 per share. So far today, the company's volume is 1.3 million shares, in keeping with its current daily average. If a stock price moves on high volume, this means that the change is a significant one. Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. 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). CRUS has a PEG ratio of 2.01, which is consistent with the industry average. While P/E ratios are important indicators of market value, a high P/E in and of itself is not bad because it may indicate a company whose earnings are growing very rapidly, so many investors look at the PEG ratio in order to get an idea of whether or not a particular P/E ratio is justified by underlying earnings growth.
The Bottom Line On any given day, a particular stock may see positive or negative change in its share price. Paying close attention to the previous ratios will help you identify key times to adjust your strategy. 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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