Free Annual Reports
Royal Bank of Canada (USA) Among Financial's Biggest Movers
The Nasdaq has climbed 0.6%, the S&P 500 has moved up 0.3% and the Dow is up 0.3%, marking a bad morning for the market. The financial sector is the category of stocks containing firms that provide financial services to commercial and retail customers. This sector includes banks, investment funds, insurance companies and real estate. Financial services perform best in low interest rate environments. A large portion of this sector generates revenue from mortgages and loans, which gain value as interest rates drop. Furthermore, when the business cycle is in an upswing, the financial sector benefits from additional investments. Improved economic conditions usually lead to more capital projects and increased personal investing. New projects require financing, which usually leads to a larger number of loans.
The Financial sector (XLF) is up 0.5%, underperforming the market overall. The biggest movers in the sector are currently:
Broker Summary: E-Trade Financial
Nationstar Mortgage Holdings (NYSE:NSM) has moved up 6.7% and is currently trading at $27.01 per share. At 1.5 million shares, the company's volume so far today is 2.7 times the current daily average. The trading volume for a stock indicates the level of investor interest. 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. 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. NSM's debt-equity ratio of 8% is on the low end. This shows that the company's assets are financed primarily through equity. 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 4.2%, AIG (NYSE:AIG) is trading at $34.50 per share. So far today, 11.9 million shares have changed hands. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. Valuation ratios allow the investor to make a quick determination as to a company's investment value. A company's price/earnings ratio (P/E ratio) provides a measure of how expensive or cheap a stock is. AIG's P/E ratio of 2.7 is under the industry average of 7.49. Companies with low P/E ratios may find it easier to surprise the market to the upside, even if their financial performance is not as strong as that of companies with high P/E ratios. A high or low P/E ratio is not good or bad in and of itself, but a company trading with a high P/E ratio must continue to post strong financial performance or its stock price is likely to fall. SEE: The P/E Ratio: A Good Market-Timing Indicator
Royal Bank of Canada (NYSE:RY) has risen 2.1% to hit a current price of $52.36 per share. The company's volume for the day so far is 251,864 shares, 0.7 times its current three-month average. 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. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. 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. RY's stock is trading for more than its book value with a P/B ratio of 2.09. This may be a sign that the company is overvalued. P/B has its shortcomings but is still widely used as a valuation metric, more relevant for use by investors looking at capital-intensive or finance-related businesses, such as banks; book value does not carry much meaning for service-based firms with few tangible assets. SEE: How Buybacks Warps The Price-To-Book Ratio
At $24.52, Carlyle (Nasdaq:CG) has slipped 1.8%. The company is trading at a volume of 18,373 shares. This is about the same trading activity as there was yesterday. 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. CG has a high P/S ratio of 5.01. This could be a good sign if the share price increases. 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 1.8%, Bankrate (NYSE:RATE) is currently trading at $18.90 per share. So far today, the company's volume is 108,090 shares, 0.1 times the average daily volume. A stock's volume conveys how excited investors are about it. 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 debt ratio measures the leverage of a company, and a company's leverage is a good way to assess risk. The debt ratio for RATE is a low 30.3%. 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.
Rising 1.7%, MasterCard (NYSE:MA) is currently trading at $432.87 per share. The company is currently trading a volume of 213,949 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. Valuation ratios include 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 dividend yield is calculated by dividing a company's dividends per share by its stock price. MA's dividend yield of 0.3% is fairly low. This may indicate that the company's stock is overpriced. 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: Investment Valuation Ratios: Dividend Yield
PartnerRe (NYSE:PRE) has increased to a share price of $74.75, a 1.5% rise. At 74,555 shares, the company's volume so far today is 0.1 times its average over the past three months. 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. Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. 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. PRE's capitalization ratio is 10.9%, which is relatively low. Investors generally consider a company with low debt and high equity levels is a good quality investment. This ratio is considered to be one of the more meaningful of the "debt" ratios - it delivers the key insight into the use of leverage by a company.
The Bottom Line No matter the economic climate, Wall Street will always have stocks that make major moves each week. 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 Financial sector (XLF) is up 0.5%, underperforming the market overall. The biggest movers in the sector are currently:
| Company | Market Cap | Percentage Change |
| Nationstar Mortgage Holdings Inc (NYSE:NSM) | $2.26 billion | +6.7% |
| American Intl Group (NYSE:AIG) | $57.23 billion | +4.2% |
| Royal Bank of Canada (USA) (NYSE:RY) | $74.05 billion | +2.1% |
| Carlyle Group LP (Nasdaq:CG) | $7.61 billion | -1.8% |
| Bankrate Inc (NYSE:RATE) | $1.92 billion | -1.8% |
| MasterCard (NYSE:MA) | $50.94 billion | +1.7% |
| PartnerRe Ltd. (NYSE:PRE) | $4.58 billion | +1.5% |
Nationstar Mortgage Holdings (NYSE:NSM) has moved up 6.7% and is currently trading at $27.01 per share. At 1.5 million shares, the company's volume so far today is 2.7 times the current daily average. The trading volume for a stock indicates the level of investor interest. 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. 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. NSM's debt-equity ratio of 8% is on the low end. This shows that the company's assets are financed primarily through equity. 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 4.2%, AIG (NYSE:AIG) is trading at $34.50 per share. So far today, 11.9 million shares have changed hands. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. Valuation ratios allow the investor to make a quick determination as to a company's investment value. A company's price/earnings ratio (P/E ratio) provides a measure of how expensive or cheap a stock is. AIG's P/E ratio of 2.7 is under the industry average of 7.49. Companies with low P/E ratios may find it easier to surprise the market to the upside, even if their financial performance is not as strong as that of companies with high P/E ratios. A high or low P/E ratio is not good or bad in and of itself, but a company trading with a high P/E ratio must continue to post strong financial performance or its stock price is likely to fall. SEE: The P/E Ratio: A Good Market-Timing Indicator
Royal Bank of Canada (NYSE:RY) has risen 2.1% to hit a current price of $52.36 per share. The company's volume for the day so far is 251,864 shares, 0.7 times its current three-month average. 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. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. 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. RY's stock is trading for more than its book value with a P/B ratio of 2.09. This may be a sign that the company is overvalued. P/B has its shortcomings but is still widely used as a valuation metric, more relevant for use by investors looking at capital-intensive or finance-related businesses, such as banks; book value does not carry much meaning for service-based firms with few tangible assets. SEE: How Buybacks Warps The Price-To-Book Ratio
Slipping 1.8%, Bankrate (NYSE:RATE) is currently trading at $18.90 per share. So far today, the company's volume is 108,090 shares, 0.1 times the average daily volume. A stock's volume conveys how excited investors are about it. 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 debt ratio measures the leverage of a company, and a company's leverage is a good way to assess risk. The debt ratio for RATE is a low 30.3%. 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.
Rising 1.7%, MasterCard (NYSE:MA) is currently trading at $432.87 per share. The company is currently trading a volume of 213,949 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. Valuation ratios include 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 dividend yield is calculated by dividing a company's dividends per share by its stock price. MA's dividend yield of 0.3% is fairly low. This may indicate that the company's stock is overpriced. 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: Investment Valuation Ratios: Dividend Yield
PartnerRe (NYSE:PRE) has increased to a share price of $74.75, a 1.5% rise. At 74,555 shares, the company's volume so far today is 0.1 times its average over the past three months. 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. Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. 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. PRE's capitalization ratio is 10.9%, which is relatively low. Investors generally consider a company with low debt and high equity levels is a good quality investment. This ratio is considered to be one of the more meaningful of the "debt" ratios - it delivers the key insight into the use of leverage by a company.
The Bottom Line No matter the economic climate, Wall Street will always have stocks that make major moves each week. 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
Investopedia.com believes that individuals can excel at managing their financial affairs. As such, we strive to provide free educational content and tools to empower individual investors, including thousands of original and objective articles and tutorials on a wide variety of financial topics.
Free Annual Reports
