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PT Telekomunikasi Indonesia Among Services' Biggest Movers on September 4, 2012
The morning has been bad for the market. The Nasdaq is down 0.8%; the S&P 500 has fallen 0.5%; and the Dow has declined 0.7%.
The Services sector (IYC) is currently ahead of the overall market, down only 0.5%, and its biggest movers are currently:
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Falling 7.4%, Netflix (Nasdaq:NFLX) is currently at a share price of $55.29. So far today, 8.1 million shares of the company's stock have changed hands. Yesterday, volume was only 4.2 million shares. In technical analysis, trading volume is used to determine the strength of a market indicator. 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 price/book value ratio is calculated by dividing the current stock price by the company's book value per share. The P/B ratio for NFLX is 4.46, indicating that the stock is trading for more than its book value. 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: Using The Price-To-Book Ratio To Evaluate Companies
Currently trading at $59.48 per share, Tiffany (NYSE:TIF) has fallen 4%. At 1.5 million 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. 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 dividend yield is measured by taking the annual dividends per share and dividing that number by the stock price. TIF has a dividend yield of 2.1%. A higher dividend yield may indicate a risk of a fall in the price of the security, or a cut in the level of dividend payments, either of which would have the effect of dropping future returns. SEE: Dividend Yield For The Downturn
Churchill Downs (Nasdaq:CHDN) has fallen 3.8% and is currently trading at $55.05 per share. The company is currently trading a volume of 27,324 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-equity (D/E) ratio is a leverage ratio. CHDN has a debt-equity ratio of 11%, which is on the low side. 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. 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.
Increasing 2.8%, PT Telekomunikasi Indonesia (NYSE:TLK) is trading at $39.67 per share. With 256,789 shares changing hands so far today, the company's volume is 1.1 times its average over the past three months. The trading volume for a stock indicates the level of investor interest. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. 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. TLK has a debt ratio of 55.3%. 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.
Lumber Liquidators Holdings (NYSE:LL) is at $47.88 per share after an increase of 2.6%. The company is trading at a volume of 192,361 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. 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. In a nutshell, the price/sales ratio shows how much Wall Street values every dollar of the company's sales. The P/S ratio for LL is 1.23, which is relatively high. 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 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.
AutoNation (NYSE:AN) has risen 2.4% to hit a current price of $41.18 per share. So far today, the company's volume is 346,167 shares, 0.9 times the current daily average. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. Looking at a company's valuation ratios is a good way of getting a basic idea as to its value as an investment. The capitalization ratio measures the debt component of the capital structure, or capitalization of a company (i.e., the sum of long-term debt liabilities and shareholder equity) to support operations and growth. AN has a capitalization ratio of 56.7%, which is on the high end. If the company is a company is in a highly competitive business and hobbled by high debt, it will find its competitors taking advantage of its problems to grab more market share. Prudent use of leverage (debt) increases the financial resources available to a company for growth and expansion.
Vail Resorts (NYSE:MTN) has risen 2% and is currently trading at $52.58 per share. So far today, 50,679 shares have changed hands. Volume is used to evaluate how meaningful the price movement of a stock is. Understanding investment valuation ratios allows an investor to assess the true value of an individual stock. 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. MTN has a P/E ratio of 119.9, high compared to the industry average of 26.07. 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: The P/E Ratio: A Good Market-Timing Indicator
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. Tools like valuation ratios and profit margins, however, are only as useful as the context you put them in; remember to take historical data and competitor performance into account.
The Services sector (IYC) is currently ahead of the overall market, down only 0.5%, and its biggest movers are currently:
| Company | Market Cap | Percentage Change |
| Netflix (Nasdaq:NFLX) | $3.32 billion | -7.4% |
| Tiffany (NYSE:TIF) | $7.85 billion | -4% |
| Churchill Downs (Nasdaq:CHDN) | $998.8 million | -3.8% |
| PT Telekomunikasi Indonesia (NYSE:TLK) | $18.84 billion | +2.8% |
| Lumber Liquidators Holdings (NYSE:LL) | $1.26 billion | +2.6% |
| AutoNation (NYSE:AN) | $4.85 billion | +2.4% |
| Vail Resorts (NYSE:MTN) | $1.86 billion | +2% |
Falling 7.4%, Netflix (Nasdaq:NFLX) is currently at a share price of $55.29. So far today, 8.1 million shares of the company's stock have changed hands. Yesterday, volume was only 4.2 million shares. In technical analysis, trading volume is used to determine the strength of a market indicator. 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 price/book value ratio is calculated by dividing the current stock price by the company's book value per share. The P/B ratio for NFLX is 4.46, indicating that the stock is trading for more than its book value. 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: Using The Price-To-Book Ratio To Evaluate Companies
Currently trading at $59.48 per share, Tiffany (NYSE:TIF) has fallen 4%. At 1.5 million 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. 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 dividend yield is measured by taking the annual dividends per share and dividing that number by the stock price. TIF has a dividend yield of 2.1%. A higher dividend yield may indicate a risk of a fall in the price of the security, or a cut in the level of dividend payments, either of which would have the effect of dropping future returns. SEE: Dividend Yield For The Downturn
Churchill Downs (Nasdaq:CHDN) has fallen 3.8% and is currently trading at $55.05 per share. The company is currently trading a volume of 27,324 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-equity (D/E) ratio is a leverage ratio. CHDN has a debt-equity ratio of 11%, which is on the low side. 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. 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.
Lumber Liquidators Holdings (NYSE:LL) is at $47.88 per share after an increase of 2.6%. The company is trading at a volume of 192,361 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. 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. In a nutshell, the price/sales ratio shows how much Wall Street values every dollar of the company's sales. The P/S ratio for LL is 1.23, which is relatively high. 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 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.
AutoNation (NYSE:AN) has risen 2.4% to hit a current price of $41.18 per share. So far today, the company's volume is 346,167 shares, 0.9 times the current daily average. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. Looking at a company's valuation ratios is a good way of getting a basic idea as to its value as an investment. The capitalization ratio measures the debt component of the capital structure, or capitalization of a company (i.e., the sum of long-term debt liabilities and shareholder equity) to support operations and growth. AN has a capitalization ratio of 56.7%, which is on the high end. If the company is a company is in a highly competitive business and hobbled by high debt, it will find its competitors taking advantage of its problems to grab more market share. Prudent use of leverage (debt) increases the financial resources available to a company for growth and expansion.
Vail Resorts (NYSE:MTN) has risen 2% and is currently trading at $52.58 per share. So far today, 50,679 shares have changed hands. Volume is used to evaluate how meaningful the price movement of a stock is. Understanding investment valuation ratios allows an investor to assess the true value of an individual stock. 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. MTN has a P/E ratio of 119.9, high compared to the industry average of 26.07. 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: The P/E Ratio: A Good Market-Timing Indicator
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. Tools like valuation ratios and profit margins, however, are only as useful as the context you put them in; remember to take historical data and competitor performance into account.
by
Investopedia Staff
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