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Questcor Pharmaceuticals Among Healthcare's Biggest Movers on September 21, 2012
Currently, the Nasdaq has moved little, the S&P 500 is trading down 0.3% and the Dow has remained steady. 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) has risen 0.1% despite little change in the market overall. Currently, the biggest movers in the sector are:
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Halozyme Therapeutics (Nasdaq:HALO) is trading at $8.14 per share, a significant rise of 27%. With 2.4 million shares changing hands so far today, the company's volume is 4.2 times its average over the past three months. Volume indicates the level of interest that investors have in a company at its current price. Valuation ratios allow the investor to make a quick determination as to a company's investment value. The price/sales ratio measures a company's stock market price by its revenues. The P/S ratio for HALO is a high 24.61. This could be a good sign if the share price increases. A limitation of the P/S ratio is that the price component measures only stock market captialization, while sales are a function of the entire capital structure, potentially leading to wide differences between levered and unlevered companies.
After a decline of 9.8%, VIVUS (Nasdaq:VVUS) has hit a share price of $21.39. So far today, 6.2 million shares have changed hands. 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 provide investors with an estimation, albeit a simplistic one, of the value of a stock. One of the favorite tools of many value investors is analyzing price/book value ratios, as it provides a measure of the underlying value of a company's assets as compared to the valuation of its equity. VVUS' P/B ratio of 6.99 shows that its share price is higher 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. 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: Investment Valuation Ratios: Price/Book Value Ratio
Questcor Pharmaceuticals (Nasdaq:QCOR) has risen 7.6% and is currently trading at $32.64 per share. The company's volume is currently 6.1 million shares for the day, 3.7 times its current daily average. The trading volume for a stock indicates the level of investor interest. 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/earnings to growth (PEG) ratio can reveal value what price/earnings (P/E) ratios alone may not so that if a company has a high P/E ratio (an indication that its stock is overpriced) but its earnings are growing very quickly, the PEG ratio may reveal that the company is actually fairly valued, or perhaps even a bargain. PEG ratio for QCOR is 0.37. 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.
Increasing 7.2%, Viropharma (Nasdaq:VPHM) is trading at $30.20 per share. The company's volume is currently 1.4 million shares. Yesterday's volume was only 708,630 shares. If a stock price makes a big move up or down, volume lets us know the significance of that move. Understanding investment valuation ratios allows an investor to assess the true value of an individual stock. The debt ratio shows the proportion of assets that a company is financing through debt. The debt ratio for VPHM is a low 38.8%. This indicates that the company engages in conservative financing with opportunities to borrow in the future at no significant risk. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.
Falling 6.4%, ISIS Pharmaceuticals (Nasdaq:ISIS) is currently at a share price of $14.42. The company's volume for the day so far is 786,842 shares, 0.7 times the current three-month average. 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. 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. 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. ISIS has a D/E ratio of 150%, which is relatively high. This shows that the company's assets are financed primarily through debt. The D/E ratio is not a pure measurement of a company's debt because it includes operational liabilities in total liabilities.
Idenix Pharmaceuticals (Nasdaq:IDIX) is trading at $4.69 per share, down 6.2%. This morning, the company is trading a volume of 2.1 million 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. A price/sales ratio is derived by dividing stock market price by company sales. IDIX's P/S ratio of 28.56 is on the high side. 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.
Centene (NYSE:CNC) is at $37.51 per share after an increase of 3.6%. At 403,487 shares, the company's volume so far today is in keeping with its current daily average. Volume is used to evaluate how meaningful the price movement of a stock is. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. The price/earnings ratio is calculated by taking a stock price and dividing it by the earnings-per-share (EPS). CNC has a P/E ratio of 41.6, high compared to the industry average of 10.95. This could mean that the market is expecting big things over the next few months or years. High P/E stocks could be "growth" stocks, while low PE stocks may be "value" stocks. SEE: Investment Valuation Ratios: Price/Earnings Ratio
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) has risen 0.1% despite little change in the market overall. Currently, the biggest movers in the sector are:
| Company | Market Cap | Percentage Change |
| Halozyme Therapeutics (Nasdaq:HALO) | $722.4 million | +27% |
| VIVUS (Nasdaq:VVUS) | $2.45 billion | -9.8% |
| Questcor Pharmaceuticals (Nasdaq:QCOR) | $3.01 billion | +7.6% |
| Viropharma (Nasdaq:VPHM) | $1.92 billion | +7.2% |
| ISIS Pharmaceuticals (Nasdaq:ISIS) | $1.47 billion | -6.4% |
| Idenix Pharmaceuticals (Nasdaq:IDIX) | $652.9 million | -6.2% |
| Centene (NYSE:CNC) | $1.94 billion | +3.6% |
Halozyme Therapeutics (Nasdaq:HALO) is trading at $8.14 per share, a significant rise of 27%. With 2.4 million shares changing hands so far today, the company's volume is 4.2 times its average over the past three months. Volume indicates the level of interest that investors have in a company at its current price. Valuation ratios allow the investor to make a quick determination as to a company's investment value. The price/sales ratio measures a company's stock market price by its revenues. The P/S ratio for HALO is a high 24.61. This could be a good sign if the share price increases. A limitation of the P/S ratio is that the price component measures only stock market captialization, while sales are a function of the entire capital structure, potentially leading to wide differences between levered and unlevered companies.
After a decline of 9.8%, VIVUS (Nasdaq:VVUS) has hit a share price of $21.39. So far today, 6.2 million shares have changed hands. 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 provide investors with an estimation, albeit a simplistic one, of the value of a stock. One of the favorite tools of many value investors is analyzing price/book value ratios, as it provides a measure of the underlying value of a company's assets as compared to the valuation of its equity. VVUS' P/B ratio of 6.99 shows that its share price is higher 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. 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: Investment Valuation Ratios: Price/Book Value Ratio
Questcor Pharmaceuticals (Nasdaq:QCOR) has risen 7.6% and is currently trading at $32.64 per share. The company's volume is currently 6.1 million shares for the day, 3.7 times its current daily average. The trading volume for a stock indicates the level of investor interest. 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/earnings to growth (PEG) ratio can reveal value what price/earnings (P/E) ratios alone may not so that if a company has a high P/E ratio (an indication that its stock is overpriced) but its earnings are growing very quickly, the PEG ratio may reveal that the company is actually fairly valued, or perhaps even a bargain. PEG ratio for QCOR is 0.37. 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.
Falling 6.4%, ISIS Pharmaceuticals (Nasdaq:ISIS) is currently at a share price of $14.42. The company's volume for the day so far is 786,842 shares, 0.7 times the current three-month average. 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. 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. 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. ISIS has a D/E ratio of 150%, which is relatively high. This shows that the company's assets are financed primarily through debt. The D/E ratio is not a pure measurement of a company's debt because it includes operational liabilities in total liabilities.
Idenix Pharmaceuticals (Nasdaq:IDIX) is trading at $4.69 per share, down 6.2%. This morning, the company is trading a volume of 2.1 million 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. A price/sales ratio is derived by dividing stock market price by company sales. IDIX's P/S ratio of 28.56 is on the high side. 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.
Centene (NYSE:CNC) is at $37.51 per share after an increase of 3.6%. At 403,487 shares, the company's volume so far today is in keeping with its current daily average. Volume is used to evaluate how meaningful the price movement of a stock is. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. The price/earnings ratio is calculated by taking a stock price and dividing it by the earnings-per-share (EPS). CNC has a P/E ratio of 41.6, high compared to the industry average of 10.95. This could mean that the market is expecting big things over the next few months or years. High P/E stocks could be "growth" stocks, while low PE stocks may be "value" stocks. SEE: Investment Valuation Ratios: Price/Earnings Ratio
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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