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Oil and Gas Operations Stocks, Including Apache, Making Big Moves on August 30, 2012
It's been a bad day for the market after the morning's trading. The Nasdaq has slipped 0.9%; the S&P 500 has decreased 0.7%; and the Dow is trading down 0.7%.
The Oil and Gas Operations sector (DIG) is currently lagging behind the overall market, down 2.3%, and its current biggest movers are:
Forex Broker Summary: UFXMarkets
BP Prudhoe Bay (NYSE:BPT) rose a significant 13.6% to reach $87.18 per share. So far today, the company's volume is 1.4 million shares, two times the current daily average. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. 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 P/E ratio has been used for ages by analysts and still remains one of the most relevant pieces of stock valuation. BPT's P/E ratio is 7.9. A high or low P/E ratio is not good or bad in and of itself, but a company trading with a high P/E ratio must continue to post strong financial performance or its stock price is likely to fall. SEE: How To Find P/E And PEG Ratios
Currently trading at $80.06 per share, InterOil Corporation (NYSE:IOC) has fallen 3.9%. So far today, 199,735 shares have changed hands. Volume indicates the level of interest that investors have in a company at its current price. 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. In a nutshell, the price/sales ratio shows how much Wall Street values every dollar of the company's sales. The P/S ratio for IOC is a high 2.79. 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.
Berry Petroleum (NYSE:BRY) has fallen 3.4% and is currently trading at $36.24 per share. At 85,359 shares, the company's volume so far today is 0.2 times the current three-month average. Volume is an important indicator because it indicates how significant a price shift is. Understanding investment valuation ratios allows an investor to assess the true value of an individual stock. The easy-to-calculate debt ratio is helpful to investors looking for a quick take on the leverage for a company. The debt ratio for BRY is 68.2%, which is relatively high. This means that the company's cash flow is significantly impacted by paying off principal and interest and that any negative change in performance or rise in interest rates could result in default. 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.
After a decline of 2.5%, SM (NYSE:SM) has hit a share price of $46.08. The company's volume is currently 164,199 shares. This is a sign that there will be less trading activity than there was yesterday. 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. 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. The debt-equity (D/E) ratio compares the total liabilities for a company to its total shareholder equity. SM has a D/E ratio of 76%. The D/E ratio percentage provides a much more dramatic perspective on a company's leverage position than the debt ratio percentage.
Matador (NYSE:MTDR) has risen 2.4% to hit a current price of $10.20 per share. So far today, the company's volume is 36,338 shares, 0.2 times the average daily volume. In technical analysis, trading volume is used to determine the strength of a market indicator. While investment valuation ratios are useful tools in estimating the attractiveness of an investment, remember that it is important to look at a company's historical performance and compare the company ratios with its competitors and industry overall. 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. MTDR's capitalization ratio is 12.8%, which is relatively low. A low capitalization ratio can signify a failure to leverage equity into investment, missing valuable opportunities for growth and expansion. This ratio is considered to be one of the more meaningful of the "debt" ratios - it delivers the key insight into the use of leverage by a company.
Murphy (NYSE:MUR) is down 2.1% to reach $51 per share. The company is currently trading a volume of 440,776 shares. 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. Dividend yield measures the income that a stock will generate for an investor. MUR has a dividend yield of 2.4%. Simply comparing the level of dividends that two stocks pay does not give a true reflection of which security is more attractive, so investors calculate the dividend yield in order to standardize dividend payments. SEE: Due Diligence On Dividends
At $84.78, Apache (NYSE:APA) has slipped 2%. The company's volume is currently 713,737 shares for the day, 0.4 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. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. As with most ratios, comparisons of company price/earnings to growth ratios (PEG ratios) are most appropriate for similar companies. APA has a PEG ratio of 2.02, which is consistent with the industry average. Because of the adjustment for earnings growth rate, the PEG ratio is somewhat more useful than many formulas for comparing 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. However, these fundamental metrics must be analyzed with historic data, industry information in addition to firm specific financial statements.
The Oil and Gas Operations sector (DIG) is currently lagging behind the overall market, down 2.3%, and its current biggest movers are:
| Company | Market Cap | Percentage Change |
| BP Prudhoe Bay (NYSE:BPT) | $1.64 billion | +13.6% |
| InterOil Corporation (NYSE:IOC) | $4.03 billion | -3.9% |
| Berry Petroleum (NYSE:BRY) | $2.03 billion | -3.4% |
| SM (NYSE:SM) | $3.08 billion | -2.5% |
| Matador (NYSE:MTDR) | $552.8 million | +2.4% |
| Murphy (NYSE:MUR) | $10.12 billion | -2.1% |
| Apache (NYSE:APA) | $33.85 billion | -2% |
BP Prudhoe Bay (NYSE:BPT) rose a significant 13.6% to reach $87.18 per share. So far today, the company's volume is 1.4 million shares, two times the current daily average. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. 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 P/E ratio has been used for ages by analysts and still remains one of the most relevant pieces of stock valuation. BPT's P/E ratio is 7.9. A high or low P/E ratio is not good or bad in and of itself, but a company trading with a high P/E ratio must continue to post strong financial performance or its stock price is likely to fall. SEE: How To Find P/E And PEG Ratios
Currently trading at $80.06 per share, InterOil Corporation (NYSE:IOC) has fallen 3.9%. So far today, 199,735 shares have changed hands. Volume indicates the level of interest that investors have in a company at its current price. 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. In a nutshell, the price/sales ratio shows how much Wall Street values every dollar of the company's sales. The P/S ratio for IOC is a high 2.79. 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.
Berry Petroleum (NYSE:BRY) has fallen 3.4% and is currently trading at $36.24 per share. At 85,359 shares, the company's volume so far today is 0.2 times the current three-month average. Volume is an important indicator because it indicates how significant a price shift is. Understanding investment valuation ratios allows an investor to assess the true value of an individual stock. The easy-to-calculate debt ratio is helpful to investors looking for a quick take on the leverage for a company. The debt ratio for BRY is 68.2%, which is relatively high. This means that the company's cash flow is significantly impacted by paying off principal and interest and that any negative change in performance or rise in interest rates could result in default. 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.
Matador (NYSE:MTDR) has risen 2.4% to hit a current price of $10.20 per share. So far today, the company's volume is 36,338 shares, 0.2 times the average daily volume. In technical analysis, trading volume is used to determine the strength of a market indicator. While investment valuation ratios are useful tools in estimating the attractiveness of an investment, remember that it is important to look at a company's historical performance and compare the company ratios with its competitors and industry overall. 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. MTDR's capitalization ratio is 12.8%, which is relatively low. A low capitalization ratio can signify a failure to leverage equity into investment, missing valuable opportunities for growth and expansion. This ratio is considered to be one of the more meaningful of the "debt" ratios - it delivers the key insight into the use of leverage by a company.
Murphy (NYSE:MUR) is down 2.1% to reach $51 per share. The company is currently trading a volume of 440,776 shares. 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. Dividend yield measures the income that a stock will generate for an investor. MUR has a dividend yield of 2.4%. Simply comparing the level of dividends that two stocks pay does not give a true reflection of which security is more attractive, so investors calculate the dividend yield in order to standardize dividend payments. SEE: Due Diligence On Dividends
At $84.78, Apache (NYSE:APA) has slipped 2%. The company's volume is currently 713,737 shares for the day, 0.4 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. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. As with most ratios, comparisons of company price/earnings to growth ratios (PEG ratios) are most appropriate for similar companies. APA has a PEG ratio of 2.02, which is consistent with the industry average. Because of the adjustment for earnings growth rate, the PEG ratio is somewhat more useful than many formulas for comparing 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. 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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