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Pharmacyclics and More Big Movers in Healthcare on August 22, 2012
On a bad day for the market, the Nasdaq has slipped 0.2%, the S&P 500 is trading down 0.4% and the Dow is down 0.5%. The healthcare sector is the category of stocks relating to medical and healthcare goods or services. This sector includes hospital management firms, health maintenance organizations (HMOs), biotechnology and a variety of medical products. Stocks in the healthcare sector are often considered to be defensive because the products and services are essential. Even during economic downturns, people will still require medical aid and medicine to overcome illness. Having a consistent demand for goods and services makes this sector less sensitive to business cycle fluctuations.
The Healthcare sector (XLV) is down 0.1%, outperforming the market overall. Currently, the biggest movers in the sector are:
Software Summary: Finviz.com Stock Screener
Sunrise Senior Living (NYSE:SRZ) has soared 59.7% to reach a current price of $14.26 per share. This morning, the company is trading a volume of 64.2 million shares. This is 157.7 times the average volume over the last three months. Volume is an important indicator because it indicates how significant a price shift is. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. The price/book value ratio, often expressed simply as "price-to-book", provides investors a way to compare the market value, or what they are paying for each share, to a conservative measure of the value of the firm. SRZ's stock is trading for more than its book value with a P/B ratio of 7.39. It is important to take the company's debt into account when using the P/B ratio as debt can boost a company's liabilities to the point where they wipe out much of the book value of its hard assets, creating artificially high P/B values. All else being equal, a stock with a low P/B value ratio is more attractive than a stock with a high ratio. SEE: How Buybacks Warps The Price-To-Book Ratio
Brookdale Senior Living (NYSE:BKD) is up 8.7% to reach a current price of $21.65 per share. The company's volume is currently 3.6 million shares for the day, 2.8 times the current daily average. 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. Understanding investment valuation ratios allows an investor to assess the true value of an individual stock. The debt-equity (D/E) ratio is a leverage ratio. The D/E ratio for BKD is 252%. Generally, a high D/E ratio means that the company may have difficulty generating enough cash to pay off its debts. The D/E ratio percentage provides a much more dramatic perspective on a company's leverage position than the debt ratio percentage.
Questcor Pharmaceuticals (Nasdaq:QCOR) has risen 3.9% and is currently trading at $42.45 per share. This morning, the company is trading a volume of 829,498 shares. A stock's volume conveys how excited investors are about it. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the 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 QCOR is a low 35.1%. A low debt ratio means the company has more available cash flow. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.
Emeritus (NYSE:ESC) is currently trading at $20.30 per share, a 3.8% increase. At 134,373 shares, the company's volume so far today is more than yesterday's 61,902 shares. When a stock price moves up or down, watching the volume is a good way of identifying how significant that shift is. 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. In a nutshell, the price/sales ratio shows how much Wall Street values every dollar of the company's sales. ESC's P/S ratio of 0.56 is fairly low. Low P/S ratios can indicate unrecognized value potential - so long as other criteria like high profit margins, low debt levels and growth prospects are in place. 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.
VIVUS (Nasdaq:VVUS) is currently trading at $21.38 per share, a 3.5% increase. So far today, the company's volume is 1.1 million shares. This is 0.3 times the current three-month 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. 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. VVUS' P/B ratio of 6.99 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. One problem with the P/B value ratio is that it can be difficult to calculate the true book value of a company, so investors should be aware that many measures of book value may provide only a rough estimate, and should be taken with a grain of salt. SEE: Using The Price-To-Book Ratio To Evaluate Companies
Rising 2.9%, Centene (NYSE:CNC) is currently trading at $40.01 per share. So far today, the company's volume is 572,127 shares, 0.7 times the average daily volume. 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. 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. The debt-equity ratio of 43% is relatively low. This shows that the company's assets are financed primarily through equity. The D/E ratio is not a pure measurement of a company's debt because it includes operational liabilities in total liabilities.
Pharmacyclics (Nasdaq:PCYC) has moved up 2.7% and is currently trading at $63.61 per share. The company is currently trading a volume of 287,149 shares. Volume indicates the level of interest that investors have in a company at its current price. 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 debt ratio gives users a quick measure of the amount of debt that the company has on its balance sheets compared to its assets. PCYC has a debt ratio of 38.1%, which is fairly low. This indicates that the company engages in conservative financing with opportunities to borrow in the future at no significant risk. 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.
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.
The Healthcare sector (XLV) is down 0.1%, outperforming the market overall. Currently, the biggest movers in the sector are:
| Company | Market Cap | Percentage Change |
| Sunrise Senior Living (NYSE:SRZ) | $520.2 million | +59.7% |
| Brookdale Senior Living (NYSE:BKD) | $2.44 billion | +8.7% |
| Questcor Pharmaceuticals (Nasdaq:QCOR) | $2.44 billion | +3.9% |
| Emeritus (NYSE:ESC) | $881 million | +3.8% |
| VIVUS (Nasdaq:VVUS) | $2.07 billion | +3.5% |
| Centene (NYSE:CNC) | $2 billion | +2.9% |
| Pharmacyclics (Nasdaq:PCYC) | $4.28 billion | +2.7% |
Sunrise Senior Living (NYSE:SRZ) has soared 59.7% to reach a current price of $14.26 per share. This morning, the company is trading a volume of 64.2 million shares. This is 157.7 times the average volume over the last three months. Volume is an important indicator because it indicates how significant a price shift is. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. The price/book value ratio, often expressed simply as "price-to-book", provides investors a way to compare the market value, or what they are paying for each share, to a conservative measure of the value of the firm. SRZ's stock is trading for more than its book value with a P/B ratio of 7.39. It is important to take the company's debt into account when using the P/B ratio as debt can boost a company's liabilities to the point where they wipe out much of the book value of its hard assets, creating artificially high P/B values. All else being equal, a stock with a low P/B value ratio is more attractive than a stock with a high ratio. SEE: How Buybacks Warps The Price-To-Book Ratio
Brookdale Senior Living (NYSE:BKD) is up 8.7% to reach a current price of $21.65 per share. The company's volume is currently 3.6 million shares for the day, 2.8 times the current daily average. 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. Understanding investment valuation ratios allows an investor to assess the true value of an individual stock. The debt-equity (D/E) ratio is a leverage ratio. The D/E ratio for BKD is 252%. Generally, a high D/E ratio means that the company may have difficulty generating enough cash to pay off its debts. The D/E ratio percentage provides a much more dramatic perspective on a company's leverage position than the debt ratio percentage.
Questcor Pharmaceuticals (Nasdaq:QCOR) has risen 3.9% and is currently trading at $42.45 per share. This morning, the company is trading a volume of 829,498 shares. A stock's volume conveys how excited investors are about it. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the 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 QCOR is a low 35.1%. A low debt ratio means the company has more available cash flow. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.
VIVUS (Nasdaq:VVUS) is currently trading at $21.38 per share, a 3.5% increase. So far today, the company's volume is 1.1 million shares. This is 0.3 times the current three-month 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. 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. VVUS' P/B ratio of 6.99 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. One problem with the P/B value ratio is that it can be difficult to calculate the true book value of a company, so investors should be aware that many measures of book value may provide only a rough estimate, and should be taken with a grain of salt. SEE: Using The Price-To-Book Ratio To Evaluate Companies
Rising 2.9%, Centene (NYSE:CNC) is currently trading at $40.01 per share. So far today, the company's volume is 572,127 shares, 0.7 times the average daily volume. 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. 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. The debt-equity ratio of 43% is relatively low. This shows that the company's assets are financed primarily through equity. The D/E ratio is not a pure measurement of a company's debt because it includes operational liabilities in total liabilities.
Pharmacyclics (Nasdaq:PCYC) has moved up 2.7% and is currently trading at $63.61 per share. The company is currently trading a volume of 287,149 shares. Volume indicates the level of interest that investors have in a company at its current price. 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 debt ratio gives users a quick measure of the amount of debt that the company has on its balance sheets compared to its assets. PCYC has a debt ratio of 38.1%, which is fairly low. This indicates that the company engages in conservative financing with opportunities to borrow in the future at no significant risk. 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.
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.
by
Investopedia Staff
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