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Tickers in this Article: XEC, CWEI, NBL, MUR, CXO, EOG, APA
The market is currently up, with the Nasdaq increasing 1.9%, the S&P 500 rising 1.8% and the Dow moving up 1.7%.

The Oil and Gas Operations sector (DIG) is up 4.3%, outperforming the market overall. The biggest movers in the sector so far are:
CompanyMarket CapPercentage Change
Cimarex (NYSE:XEC)$4.87 billion+5.8%
Clayton Williams Energy (Nasdaq:CWEI)$598.6 million+4.8%
Noble Energy (NYSE:NBL)$15.33 billion+3.9%
Murphy (NYSE:MUR)$9.72 billion+3.8%
Concho Resources (NYSE:CXO)$9.24 billion+3.7%
EOG (NYSE:EOG)$29.31 billion+3.1%
Apache (NYSE:APA)$33.05 billion+3%
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After an increase of 5.8%, Cimarex (NYSE:XEC) has reached a current price of $59.87. This morning, the company is trading a volume of 261,523 shares. 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. A simple P/E ratio can reveal the stock's real market value and show how the valuation compares to its industry group or a benchmark like the S&P 500 Index. XEC's P/E ratio of 11.7 is under the industry average of 20.32. A low P/E ratio may indicate that the market expects relatively slower earnings growth. 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: Profit With The Power Of Price-To-Earnings

Rising 4.8%, Clayton Williams Energy (Nasdaq:CWEI) is currently trading at $51.56 per share. The company's volume for the day so far is 16,480 shares, consistent with its current three-month average. A stock's volume conveys how excited investors are about it. Valuation ratios allow the investor to make a quick determination as to a company's investment value. 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. CWEI has a high D/E ratio of 182%. This shows that the company's assets are financed primarily through debt. The D/E ratio is not a pure measurement of a company's debt because it includes operational liabilities in total liabilities.

Noble Energy (NYSE:NBL) has moved up 3.9% and is currently trading at $89.53 per share. So far today, 285,501 shares of the company's stock have changed hands. This is on pace to fall short of yesterday's volume of 835,019 shares. If a stock price makes a big move up or down, volume lets us know the significance of that move. 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 capitalization ratio is calculated by dividing long-term debt by the sum of long-term debt and shareholders' equity. NBL has a capitalization ratio of 34.3%. A low level of debt and a healthy proportion of equity in a company's capital structure is an indication of financial fitness.

Murphy (NYSE:MUR) has risen 3.8% to hit a current price of $51.93 per share. At 546,550 shares, the company's volume so far today is in keeping with its current daily average. Volume is an important indicator because it indicates how significant a price shift is. 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 debt ratio gives users a quick measure of the amount of debt that the company has on its balance sheets compared to its assets. MUR has a low debt ratio of 38%. A low debt ratio means the company has more available cash flow. 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.

Concho Resources (NYSE:CXO) is currently trading at $91.88 per share, a 3.7% increase. So far today, 303,269 shares have changed hands. 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. 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/earnings to growth (PEG) ratio can reveal value what price/earnings (P/E) ratios alone may not so that if a company has a high P/E ratio (an indication that its stock is overpriced) but its earnings are growing very quickly, the PEG ratio may reveal that the company is actually fairly valued, or perhaps even a bargain. PEG ratio for CXO is 1.06. Because of the adjustment for earnings growth rate, the PEG ratio is somewhat more useful than many formulas for comparing companies in different industries.

EOG (NYSE:EOG) has risen 3.1% and is currently trading at $111.89 per share. At 536,154 shares, the company's volume so far today is 0.3 times the current three-month average. In technical analysis, trading volume is used to determine the strength of a market indicator. Understanding investment valuation ratios allows an investor to assess the true value of an individual stock. The price/book value ratio is one of the more common methods of determining whether a stock is fairly valued. EOG's stock is trading for more than its book value with a P/B ratio of 2.26. 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 has its shortcomings but is still widely used as a valuation metric, more relevant for use by investors looking at capital-intensive or finance-related businesses, such as banks; book value does not carry much meaning for service-based firms with few tangible assets. SEE: Investment Valuation Ratios: Price/Book Value Ratio

After an increase of 3%, Apache (NYSE:APA) has reached a current price of $87. The company is trading at a volume of 822,684 shares. This is on pace to fall short of yesterday's volume of 2.6 million shares. 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. 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 dividend yield is measured by taking the annual dividends per share and dividing that number by the stock price. APA has a dividend yield of 0.8%, which is fairly low. This may indicate that the company's stock is overpriced. It is important to remember that while a higher dividend yield is more attractive, all else being equal, a higher dividend yield can also indicate greater perceived risk. SEE: Guide To Stock-Picking Strategies: Income Investing

The Bottom Line The nature of the market is such that stocks will have good days and bad days. Paying close attention to the previous ratios will help you identify key times to adjust your strategy. However, these fundamental metrics must be analyzed with historic data, industry information in addition to firm specific financial statements.

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