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Oil and Gas Operations Stocks, Including Hess, Making Big Moves on October 4, 2012
It's been a good morning for the market. The Nasdaq has moved up 0.3%; the S&P 500 has risen 0.6%; and the Dow has risen 0.6%.
Outperforming the market overall, the Oil and Gas Operations sector (DIG) is up 1.5% and its biggest movers so far today are:
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Valero (NYSE:VLO) has risen 3.5% to hit a current price of $32.70 per share. So far today, the company's volume is 3.1 million shares, consistent with its current daily average. Volume is used to evaluate how meaningful the price movement of a stock is. 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. 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. VLO's P/S ratio of 0.1 is fairly low. Highly levered companies are likely to have lower P/S ratios because the price aspect of this ratio only measures stock market valuation while sales is a function of both stock market and bond market capitalization. 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.
Tesoro (NYSE:TSO) has increased to a share price of $44.03, a 3.5% rise. This morning, the company is trading a volume of 2.4 million shares. A stock's volume conveys how excited investors are about it. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. 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. TSO has a high debt ratio of 60.5%. This might mean that the company now has low borrowing capacity, which reduces it's financial flexibility. 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 an increase of 2.2%, Suburban Propane Partners (NYSE:SPH) has reached a current price of $43.50. At 197,916 shares, the company's volume so far today is consistent with its average over the last three months. 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. The debt-equity (D/E) ratio compares the total liabilities for a company to its total shareholder equity. The D/E ratio for SPH is 103%. Companies with high D/E ratios may have difficulty attracting additional investment capital. The D/E ratio percentage provides a much more dramatic perspective on a company's leverage position than the debt ratio percentage.
Falling 1.9%, Ultra (NYSE:UPL) is currently at a share price of $21.77. The company is trading at a volume of 1.3 million shares. High volume indicates a lot of investor interest while low volume indicates the opposite. Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. The price/book value ratio provides a way of evaluating whether a stock is relatively cheap or expensive. UPL's P/B ratio of 6.82 shows that its share price is higher than its book value. This may be a sign that the company is overvalued. 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
Martin Midstream Partners (Nasdaq:MMLP) has fallen 1.9% and is currently trading at $35.33 per share. So far today, the company's volume is 40,418 shares, 0.6 times the average daily volume. If a stock price moves on high volume, this means that the change is a significant one. 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. A company's price/earnings ratio (P/E ratio) provides a measure of how expensive or cheap a stock is. MMLP's P/E ratio of 40.0 is above the industry average of 12.6. A company with a high P/E ratio will eventually have to live up to the high rating by substantially increasing its earnings, or the price will need to drop. A high P/E ratio indicates a stock that is expensive, while a low P/E ratio indicates a stock that is cheap. SEE: The P/E Ratio: A Good Market-Timing Indicator
Hess (NYSE:HES) is up 1.6% to reach a current price of $53.48 per share. The company is currently trading a volume of 984,036 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. Investment valuation ratios can be very useful in estimating whether a stock price is too high, reasonable or a bargain investment opportunity. As with most ratios, comparisons of company price/earnings to growth ratios (PEG ratios) are most appropriate for similar companies. HES' PEG ratio of 2.52 is in line 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.
Whiting (NYSE:WLL) is currently trading at $46.58 per share, a 1.5% increase. The company's volume is currently 466,856 shares for the day, 0.3 times its average over the past three months. In technical analysis, trading volume is used to determine the strength of a market indicator. 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. 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 WLL is 30.3%. A low level of debt and a healthy proportion of equity in a company's capital structure is an indication of financial fitness.
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.
Outperforming the market overall, the Oil and Gas Operations sector (DIG) is up 1.5% and its biggest movers so far today are:
| Company | Market Cap | Percentage Change |
| Valero (NYSE:VLO) | $17.43 billion | +3.5% |
| Tesoro (NYSE:TSO) | $5.95 billion | +3.5% |
| Suburban Propane Partners (NYSE:SPH) | $2.12 billion | +2.2% |
| Ultra (NYSE:UPL) | $3.39 billion | -1.9% |
| Martin Midstream Partners (Nasdaq:MMLP) | $832.2 million | -1.9% |
| Hess (NYSE:HES) | $17.98 billion | +1.6% |
| Whiting (NYSE:WLL) | $5.4 billion | +1.5% |
Valero (NYSE:VLO) has risen 3.5% to hit a current price of $32.70 per share. So far today, the company's volume is 3.1 million shares, consistent with its current daily average. Volume is used to evaluate how meaningful the price movement of a stock is. 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. 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. VLO's P/S ratio of 0.1 is fairly low. Highly levered companies are likely to have lower P/S ratios because the price aspect of this ratio only measures stock market valuation while sales is a function of both stock market and bond market capitalization. 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.
Tesoro (NYSE:TSO) has increased to a share price of $44.03, a 3.5% rise. This morning, the company is trading a volume of 2.4 million shares. A stock's volume conveys how excited investors are about it. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. 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. TSO has a high debt ratio of 60.5%. This might mean that the company now has low borrowing capacity, which reduces it's financial flexibility. 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 an increase of 2.2%, Suburban Propane Partners (NYSE:SPH) has reached a current price of $43.50. At 197,916 shares, the company's volume so far today is consistent with its average over the last three months. 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. The debt-equity (D/E) ratio compares the total liabilities for a company to its total shareholder equity. The D/E ratio for SPH is 103%. Companies with high D/E ratios may have difficulty attracting additional investment capital. The D/E ratio percentage provides a much more dramatic perspective on a company's leverage position than the debt ratio percentage.
Falling 1.9%, Ultra (NYSE:UPL) is currently at a share price of $21.77. The company is trading at a volume of 1.3 million shares. High volume indicates a lot of investor interest while low volume indicates the opposite. Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. The price/book value ratio provides a way of evaluating whether a stock is relatively cheap or expensive. UPL's P/B ratio of 6.82 shows that its share price is higher than its book value. This may be a sign that the company is overvalued. 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
Martin Midstream Partners (Nasdaq:MMLP) has fallen 1.9% and is currently trading at $35.33 per share. So far today, the company's volume is 40,418 shares, 0.6 times the average daily volume. If a stock price moves on high volume, this means that the change is a significant one. 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. A company's price/earnings ratio (P/E ratio) provides a measure of how expensive or cheap a stock is. MMLP's P/E ratio of 40.0 is above the industry average of 12.6. A company with a high P/E ratio will eventually have to live up to the high rating by substantially increasing its earnings, or the price will need to drop. A high P/E ratio indicates a stock that is expensive, while a low P/E ratio indicates a stock that is cheap. SEE: The P/E Ratio: A Good Market-Timing Indicator
Hess (NYSE:HES) is up 1.6% to reach a current price of $53.48 per share. The company is currently trading a volume of 984,036 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. Investment valuation ratios can be very useful in estimating whether a stock price is too high, reasonable or a bargain investment opportunity. As with most ratios, comparisons of company price/earnings to growth ratios (PEG ratios) are most appropriate for similar companies. HES' PEG ratio of 2.52 is in line 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.
Whiting (NYSE:WLL) is currently trading at $46.58 per share, a 1.5% increase. The company's volume is currently 466,856 shares for the day, 0.3 times its average over the past three months. In technical analysis, trading volume is used to determine the strength of a market indicator. 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. 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 WLL is 30.3%. A low level of debt and a healthy proportion of equity in a company's capital structure is an indication of financial fitness.
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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