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Tickers in this Article: SM, PXP, BPT, MUR, CLR, PTR, CEO
The morning has been bad for the market. The Nasdaq is trading down 0.2%; the S&P 500 has slipped 0.4%; and the Dow has decreased 0.5%.

The Oil and Gas Operations sector (DIG) is currently lagging behind the overall market, down 1.2%, and its current biggest movers are:
CompanyMarket CapPercentage Change
SM (NYSE:SM)$3.17 billion-3.4%
Plains Exploration & Production (NYSE:PXP)$5.29 billion-2.6%
BP Prudhoe Bay (NYSE:BPT)$2.31 billion-2.5%
Murphy (NYSE:MUR)$10.68 billion-2.5%
Continental Resources (NYSE:CLR)$13.39 billion-2.3%
PetroChina Company Limited (NYSE:PTR)$230.31 billion-1.9%
CNOOC Limited (NYSE:CEO)$86.88 billion-1.9%
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SM (NYSE:SM) is down 3.4% to reach $47.03 per share. The company's volume is currently 240,416 shares for the day, lighter than yesterday's volume of 738,588 shares. High volume indicates a lot of investor interest while low volume indicates the opposite. 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 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 SM is a high 2.19. This could be a good sign if the share price increases. 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.

At $39.92, Plains Exploration & Production (NYSE:PXP) has slipped 2.6%. The company is currently trading a volume of 403,487 shares. This is 0.3 times its current three-month average. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. 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. PXP has a capitalization ratio of 54.1%, which is on the high end. The company may have trouble meeting operating and debt liabilities on time and surviving adverse economic conditions. Prudent use of leverage (debt) increases the financial resources available to a company for growth and expansion.

BP Prudhoe Bay (NYSE:BPT) is currently trading at a share price of $105.26, a 2.5% decline. The company's volume is currently 210,509 shares for the day, 1.4 times its current daily average. Volume is used to evaluate how meaningful the price movement of a stock is. 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 price/earnings ratio is calculated by taking a stock price and dividing it by the earnings-per-share (EPS). BPT has a P/E ratio of 12.4. From the investor's perspective, a stock with a lower ratio is relatively cheaper than a stock with a higher ratio. SEE: Profit With The Power Of Price-To-Earnings

Currently trading at $53.65 per share, Murphy (NYSE:MUR) has fallen 2.5%. So far today, the company's volume is 408,642 shares. 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. 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). MUR has a PEG ratio of 2.54, 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.

Slipping 2.3%, Continental Resources (NYSE:CLR) is currently trading at $72.24 per share. This morning, 327,303 shares have been traded, on pace to finish the day below yesterday's volume of 1.2 million 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. 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. The P/B ratio for CLR is 4.69, indicating that the stock is trading for more than its book value. This high share price relative to asset value is likely to indicate that the company has been earning a very high return on its assets. A weakness of the P/B value ratio is that while the price component is easily determined by looking at the stock quote, the book value component is more difficult to estimate and more open to individual interpretation and analysis. SEE: How Buybacks Warps The Price-To-Book Ratio

After a decline of 1.9%, PetroChina Company Limited (NYSE:PTR) has hit a share price of $123.48. So far today, 35,365 shares have changed hands. This is 0.3 times the average volume over the last three months. If a stock price moves on high volume, this means that the change is a significant one. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. The dividend yield is calculated by dividing a company's dividends per share by its stock price. PTR has a dividend yield of 3.7%. For income-oriented investors such as retirees, a stock with a high dividend yield may be more attractive than a stock with a low dividend yield. SEE: Guide To Stock-Picking Strategies: Income Investing

CNOOC Limited (NYSE:CEO) has decreased to $190.87 per share, a 1.9% fall. The company's volume is currently 78,336 shares for the day, 0.8 times the current daily average. In technical analysis, trading volume is used to determine the strength of a market indicator. 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 debt-equity (D/E) ratio is a measurement of how much suppliers, lenders, creditors and obligors have committed to the company versus what the shareholders have committed. CEO's debt-equity ratio of 14% 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. 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.

The Bottom Line On any given day, a particular stock may see positive or negative change in its share price. It is important to weigh current activity against historical performance when making any investment decisions. Keep in mind that all these ratios should be compared against historical numbers and industry information in order to get a more complete picture.

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