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Real Estate Operations Stocks Making Big Moves on June 21, 2012
The market is having a bad day so far: the Nasdaq has declined 1.1%; the S&P 500 is trading down 0.9%; and the Dow has fallen 0.7%.
The Real Estate Operations sector (IYR) is down 1%, outperforming the market overall. Currently, the biggest movers in the sector are:
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Sabra Health Care REIT (Nasdaq:SBRA) is up 3.1% to reach a current price of $16.75 per share. So far today, the company's volume is 323,342 shares, 0.4 times its current three-month average. If a stock price moves on high volume, this means that the change is a significant one. 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). P/E ratio for SBRA is 32.7. From the investor's perspective, a stock with a lower ratio is relatively cheaper than a stock with a higher ratio. SEE: Understanding The P/E Ratio
Zillow (Nasdaq:Z) has risen 2.8% and is currently trading at $34.45 per share. The company's volume for the morning is 134,326 shares. This is 0.2 times its average daily volume. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. Margin analysis is a great way to understand the profitability of companies. Z's gross profit margin of 94.9% is fairly high. This means that the company will have a lot of money left over to spend on other business operations, such as research and development or marketing. Relative to its gross profit margin, Z's operating profit margin of 7.4% and net profit margin of 4.7% are high.
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/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. The P/B ratio for Z is 9.24, 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. Users need to be careful when applying this ratio though, as it is more useful for industrial companies that have a lot of tangible assets than it is for technology or consumer product companies that may not have much in the way of hard assets. SEE: Investment Valuation Ratios: Price/Book Value Ratio
Post Properties (NYSE:PPS) is trading at $47.16 per share, down 2.1%. So far today, the company's volume is 204,095 shares, below yesterday's volume of 258,567 shares. Volume is used to evaluate how meaningful the price movement of a stock is. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. The dividend yield is calculated by dividing a company's dividends per share by its stock price. PPS' dividend yield is 2.1%. It is important to remember that while a higher dividend yield is more attractive, all else being equal, a higher dividend yield can also indicate greater perceived risk. SEE: Due Diligence On Dividends
Jones Lang LaSalle (NYSE:JLL) has decreased to $72.04 per share, a 1.9% fall. So far today, the company's volume is 118,786 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. A price/sales ratio is derived by dividing stock market price by company sales. JLL has a P/S ratio of 0.98, on the low end. A company with a lower P/S ratio is generally considered more attractive, since investors are paying less for each dollar of sales. 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.
Slipping 1.7%, Alexandria Real Estate Equities (NYSE:ARE) is currently trading at $70.17 per share. The company's volume for the day so far is 73,162 share, 0.2 times its average over the past three months. A stock's volume conveys how excited investors are about it. 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. The debt ratio shows the proportion of assets that a company is financing through debt. ARE's debt ratio of 49.7% is on the low side. In other words, the company is less sensitive to changes in business or interest rates since less of its cash flow is dedicated to paying off loan expenses. 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.
Equity Lifestyle Properties (NYSE:ELS) has fallen 1.7% and is currently trading at $67.33 per share. So far today, the company's volume is 128,048 shares. This is 0.4 times its current daily average. Volume is an important indicator because it indicates how significant a price 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. The debt-equity (D/E) ratio compares the total liabilities for a company to its total shareholder equity. The D/E ratio for ELS is 314%. 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.
Currently trading at $138.83 per share, Avalonbay (NYSE:AVB) has fallen 1.6%. The company's volume is currently 182,128 shares for the day, lighter than yesterday's volume of 583,054 shares. The trading volume for a stock indicates the level of investor interest. 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 assumption with high price/earnings stocks (generally of the growth variety) is that investors are willing to buy at a high price because they believe that the stock has significant growth potential, and the price/earnings to growth (PEG) ratio helps investors determine the degree of reliability of that growth assumption. PEG ratio for AVB is consistent with the industry average at 2.72. 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.
The Bottom Line No matter the economic climate, Wall Street will always have stocks that make major moves each week. Paying close attention to the previous ratios will help you identify key times to adjust your strategy. 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 Real Estate Operations sector (IYR) is down 1%, outperforming the market overall. Currently, the biggest movers in the sector are:
| Company | Market Cap | Percentage Change |
| Sabra Health Care REIT Inc (Nasdaq:SBRA) | $602.1 million | +3.1% |
| Zillow Inc (Nasdaq:Z) | $965.5 million | +2.8% |
| Post Properties Inc (NYSE:PPS) | $2.61 billion | -2.1% |
| Jones Lang LaSalle Incorporated (NYSE:JLL) | $3.21 billion | -1.9% |
| Alexandria Real Estate Equities Inc (NYSE:ARE) | $4.43 billion | -1.7% |
| Equity Lifestyle Properties, Inc. (NYSE:ELS) | $2.84 billion | -1.7% |
| Avalonbay Communities (NYSE:AVB) | $13.53 billion | -1.6% |
Sabra Health Care REIT (Nasdaq:SBRA) is up 3.1% to reach a current price of $16.75 per share. So far today, the company's volume is 323,342 shares, 0.4 times its current three-month average. If a stock price moves on high volume, this means that the change is a significant one. 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). P/E ratio for SBRA is 32.7. From the investor's perspective, a stock with a lower ratio is relatively cheaper than a stock with a higher ratio. SEE: Understanding The P/E Ratio
Zillow (Nasdaq:Z) has risen 2.8% and is currently trading at $34.45 per share. The company's volume for the morning is 134,326 shares. This is 0.2 times its average daily volume. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. Margin analysis is a great way to understand the profitability of companies. Z's gross profit margin of 94.9% is fairly high. This means that the company will have a lot of money left over to spend on other business operations, such as research and development or marketing. Relative to its gross profit margin, Z's operating profit margin of 7.4% and net profit margin of 4.7% are high.
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/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. The P/B ratio for Z is 9.24, 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. Users need to be careful when applying this ratio though, as it is more useful for industrial companies that have a lot of tangible assets than it is for technology or consumer product companies that may not have much in the way of hard assets. SEE: Investment Valuation Ratios: Price/Book Value Ratio
Post Properties (NYSE:PPS) is trading at $47.16 per share, down 2.1%. So far today, the company's volume is 204,095 shares, below yesterday's volume of 258,567 shares. Volume is used to evaluate how meaningful the price movement of a stock is. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. The dividend yield is calculated by dividing a company's dividends per share by its stock price. PPS' dividend yield is 2.1%. It is important to remember that while a higher dividend yield is more attractive, all else being equal, a higher dividend yield can also indicate greater perceived risk. SEE: Due Diligence On Dividends
Jones Lang LaSalle (NYSE:JLL) has decreased to $72.04 per share, a 1.9% fall. So far today, the company's volume is 118,786 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. A price/sales ratio is derived by dividing stock market price by company sales. JLL has a P/S ratio of 0.98, on the low end. A company with a lower P/S ratio is generally considered more attractive, since investors are paying less for each dollar of sales. 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.
Slipping 1.7%, Alexandria Real Estate Equities (NYSE:ARE) is currently trading at $70.17 per share. The company's volume for the day so far is 73,162 share, 0.2 times its average over the past three months. A stock's volume conveys how excited investors are about it. 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. The debt ratio shows the proportion of assets that a company is financing through debt. ARE's debt ratio of 49.7% is on the low side. In other words, the company is less sensitive to changes in business or interest rates since less of its cash flow is dedicated to paying off loan expenses. 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.
Equity Lifestyle Properties (NYSE:ELS) has fallen 1.7% and is currently trading at $67.33 per share. So far today, the company's volume is 128,048 shares. This is 0.4 times its current daily average. Volume is an important indicator because it indicates how significant a price 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. The debt-equity (D/E) ratio compares the total liabilities for a company to its total shareholder equity. The D/E ratio for ELS is 314%. 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.
Currently trading at $138.83 per share, Avalonbay (NYSE:AVB) has fallen 1.6%. The company's volume is currently 182,128 shares for the day, lighter than yesterday's volume of 583,054 shares. The trading volume for a stock indicates the level of investor interest. 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 assumption with high price/earnings stocks (generally of the growth variety) is that investors are willing to buy at a high price because they believe that the stock has significant growth potential, and the price/earnings to growth (PEG) ratio helps investors determine the degree of reliability of that growth assumption. PEG ratio for AVB is consistent with the industry average at 2.72. 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.
The Bottom Line No matter the economic climate, Wall Street will always have stocks that make major moves each week. Paying close attention to the previous ratios will help you identify key times to adjust your strategy. 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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