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Philippine Long Distance Telephone and More Big Movers in Services on August 28, 2012
The Nasdaq has slipped 0.1%, the S&P 500 has declined 0.1% and the Dow is trading down 0.1%, marking a bad morning for the market.
The Services sector (IYC) has risen 0.1% despite little change in the market overall. Currently, the biggest movers in the sector are:
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Mattress (Nasdaq:MFRM) has moved up 8.3% and is currently trading at $30.28 per share. So far today, 108,620 shares have changed hands, which is more trading activity than there was yesterday. 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. Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. The price/book value ratio is calculated by dividing the current stock price by the company's book value per share. MFRM's stock is trading for more than its book value with a P/B ratio of 4.36. 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: Investment Valuation Ratios: Price/Book Value Ratio
Slipping 6.5%, Brown Shoe Company (NYSE:BWS) is currently trading at $14.40 per share. This morning, the company is trading a volume of 1.2 million shares. This is 2.4 times the current three-month average. If a stock price makes a big move up or down, volume lets us know the significance of that move. 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. Dividend yield is a way to measure how much cash flow you are getting for each dollar invested in an equity position - in other words, how much "bang for your buck" you are getting from dividends. BWS has a dividend yield of 1.8%, which is fairly low. A company with a low dividend yield may be a safer investment in the long run. A stock's dividend yield depends on the nature of a company's business, its posture in the marketplace (value or growth oriented), its earnings and cash flow, and its dividend policy. SEE: Dividend Yield For The Downturn
Liquidity Services (Nasdaq:LQDT) has risen 6% to hit a current price of $50.92 per share. At 252,179 shares, the company's volume so far today is in keeping with its 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. Investment valuation ratios can be very useful in estimating whether a stock price is too high, reasonable or a bargain investment opportunity. While measuring a price/earnings ratio (P/E ratio) is a popular valuation technique, the measure cannot be calculated for companies without earnings, so some investors analyze the price/sales ratio. The P/S ratio for LQDT is a high 3.77. In young companies, a high P/S ratio is a sign of sales growth that is expected to turn into earnings and cash flow. 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.
Interval Leisure Group (Nasdaq:IILG) has fallen 3.8% and is currently trading at $18.33 per share. The company's volume for the day so far is 64,327 shares. High volume indicates a lot of investor interest while low volume indicates the opposite. 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 debt ratio shows the proportion of assets that a company is financing through debt. IILG's debt ratio of 72.1% is fairly high. This might mean that the company now has low borrowing capacity, which reduces it's financial flexibility. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.
Francesca's (Nasdaq:FRAN) is currently trading at $35.70 per share, a 3.4% increase. So far today, the company's volume is 240,067 shares, consistent with the volume from yesterday lighter than yesterday's volume of 507,276 shares. A stock's volume conveys how excited investors are about it. 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 is a leverage ratio. FRAN has a low debt-equity ratio of 43%. Companies with low D/E ratios are more attractive to investors because they are better able to protect their business interests in times of decline. The D/E ratio is not a pure measurement of a company's debt because it includes operational liabilities in total liabilities.
Robert Half International (NYSE:RHI) is currently trading at a share price of $25.94, a 3.3% decline. The company's volume for the day so far is 1.4 million shares. This is 1.5 times its average volume over the past three months. In technical analysis, trading volume is used to determine the strength of a market indicator. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. The capitalization ratio is calculated by dividing long-term debt by the sum of long-term debt and shareholders' equity. RHI has a low capitalization ratio of 0.2%. Investors generally consider a company with low debt and high equity levels is a good quality investment. Prudent use of leverage (debt) increases the financial resources available to a company for growth and expansion.
At $62.73, Philippine Long Distance Telephone (NYSE:PHI) has slipped 2.4%. At 45,946 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. There are generally two price/earnings ratios calculated: the first, called the trailing Price/Earnings ratio, is calculated using the previous years actual earnings; the second, called forward Price/Earnings ratio, is calculated using the next year's estimated earnings. Compared to the industry average of 9.55, PHI's P/E ratio of 19.7 is quite high. This could mean that the market is expecting big things over the next few months or years. A high P/E ratio indicates a stock that is expensive, while a low P/E ratio indicates a stock that is cheap. SEE: Profit With The Power Of Price-To-Earnings
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. Keep in mind that all these ratios should be compared against historical numbers and industry information in order to get a more complete picture.
The Services sector (IYC) has risen 0.1% despite little change in the market overall. Currently, the biggest movers in the sector are:
| Company | Market Cap | Percentage Change |
| Mattress (Nasdaq:MFRM) | $944.5 million | +8.3% |
| Brown Shoe Company (NYSE:BWS) | $660 million | -6.5% |
| Liquidity Services (Nasdaq:LQDT) | $1.49 billion | +6% |
| Interval Leisure Group (Nasdaq:IILG) | $1.08 billion | -3.8% |
| Francesca\'s (Nasdaq:FRAN) | $1.51 billion | +3.4% |
| Robert Half International (NYSE:RHI) | $3.8 billion | -3.3% |
| Philippine Long Distance Telephone (NYSE:PHI) | $13.88 billion | -2.4% |
Mattress (Nasdaq:MFRM) has moved up 8.3% and is currently trading at $30.28 per share. So far today, 108,620 shares have changed hands, which is more trading activity than there was yesterday. 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. Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. The price/book value ratio is calculated by dividing the current stock price by the company's book value per share. MFRM's stock is trading for more than its book value with a P/B ratio of 4.36. 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: Investment Valuation Ratios: Price/Book Value Ratio
Slipping 6.5%, Brown Shoe Company (NYSE:BWS) is currently trading at $14.40 per share. This morning, the company is trading a volume of 1.2 million shares. This is 2.4 times the current three-month average. If a stock price makes a big move up or down, volume lets us know the significance of that move. 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. Dividend yield is a way to measure how much cash flow you are getting for each dollar invested in an equity position - in other words, how much "bang for your buck" you are getting from dividends. BWS has a dividend yield of 1.8%, which is fairly low. A company with a low dividend yield may be a safer investment in the long run. A stock's dividend yield depends on the nature of a company's business, its posture in the marketplace (value or growth oriented), its earnings and cash flow, and its dividend policy. SEE: Dividend Yield For The Downturn
Liquidity Services (Nasdaq:LQDT) has risen 6% to hit a current price of $50.92 per share. At 252,179 shares, the company's volume so far today is in keeping with its 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. Investment valuation ratios can be very useful in estimating whether a stock price is too high, reasonable or a bargain investment opportunity. While measuring a price/earnings ratio (P/E ratio) is a popular valuation technique, the measure cannot be calculated for companies without earnings, so some investors analyze the price/sales ratio. The P/S ratio for LQDT is a high 3.77. In young companies, a high P/S ratio is a sign of sales growth that is expected to turn into earnings and cash flow. 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.
Francesca's (Nasdaq:FRAN) is currently trading at $35.70 per share, a 3.4% increase. So far today, the company's volume is 240,067 shares, consistent with the volume from yesterday lighter than yesterday's volume of 507,276 shares. A stock's volume conveys how excited investors are about it. 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 is a leverage ratio. FRAN has a low debt-equity ratio of 43%. Companies with low D/E ratios are more attractive to investors because they are better able to protect their business interests in times of decline. The D/E ratio is not a pure measurement of a company's debt because it includes operational liabilities in total liabilities.
Robert Half International (NYSE:RHI) is currently trading at a share price of $25.94, a 3.3% decline. The company's volume for the day so far is 1.4 million shares. This is 1.5 times its average volume over the past three months. In technical analysis, trading volume is used to determine the strength of a market indicator. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. The capitalization ratio is calculated by dividing long-term debt by the sum of long-term debt and shareholders' equity. RHI has a low capitalization ratio of 0.2%. Investors generally consider a company with low debt and high equity levels is a good quality investment. Prudent use of leverage (debt) increases the financial resources available to a company for growth and expansion.
At $62.73, Philippine Long Distance Telephone (NYSE:PHI) has slipped 2.4%. At 45,946 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. There are generally two price/earnings ratios calculated: the first, called the trailing Price/Earnings ratio, is calculated using the previous years actual earnings; the second, called forward Price/Earnings ratio, is calculated using the next year's estimated earnings. Compared to the industry average of 9.55, PHI's P/E ratio of 19.7 is quite high. This could mean that the market is expecting big things over the next few months or years. A high P/E ratio indicates a stock that is expensive, while a low P/E ratio indicates a stock that is cheap. SEE: Profit With The Power Of Price-To-Earnings
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. 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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