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Tickers in this Article: THR, KLAC, DWRE, SNDK, LRCX, NICE, CYMI
The market is on the rise this morning. The Nasdaq has climbed 0.1%; the S&P 500 is up 0.2%; and the Dow has risen 0.3%. The technology sector is a category of stocks relating to the research, development and/or distribution of technologically based goods and services. This sector contains businesses revolving around the manufacturing of electronics, creation of software, computers or products and services relating to information technology. The technology sector offers a wide arrange of products and services for both customers and other businesses. Consumer goods like personal computers, stereos and televisions are continually improved and upgraded, offering the latest technology to all users. Businesses receive information and services from software and database systems, which allow the companies to make strategic business decisions.

Underperforming the market overall, the Technology sector (XLK) is up 0.1%, and these are its current biggest movers:
CompanyMarket CapPercentage Change
Thermon Group Holdings (NYSE:THR)$767.9 million-4.3%
KLA-Tencor (Nasdaq:KLAC)$8.47 billion-4%
Demandware (NYSE:DWRE)$897.7 million-3.9%
SanDisk (Nasdaq:SNDK)$10.92 billion+3.7%
Lam (Nasdaq:LRCX)$4.13 billion-3.4%
Nice Systems Ltd (Nasdaq:NICE)$1.93 billion+3.4%
Cymer (Nasdaq:CYMI)$1.78 billion-3.3%
Broker Summary: E-Trade Financial

Falling 4.3%, Thermon Group Holdings (NYSE:THR) is currently at a share price of $23.98. The company's volume is currently 102,456 shares. This is greater than yesterday's volume of 95,449 shares. High volume indicates a lot of investor interest while low volume indicates the opposite. Investors can use valuation ratios as tools to estimate what kind of deal a particular 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. THR has a PEG ratio of 2.1, which is consistent with the industry average. Because of the adjustment for earnings growth rate, the PEG ratio is somewhat more useful than many formulas for comparing companies in different industries.

KLA-Tencor (Nasdaq:KLAC) is currently trading at a share price of $48.84, a 4% decline. So far today, the company's volume is 2.6 million shares, 1.3 times the average daily volume. 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. 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. 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. KLAC's P/B ratio of 2.45 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. 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

Slipping 3.9%, Demandware (NYSE:DWRE) is currently trading at $29.66 per share. The company's volume for the day so far is 387,954 shares. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. If the price/book value ratio of a stock is high, it may indicate that the stock is expensive, while a lower ratio may indicate that the stock is a bargain. DWRE has a P/B ratio of 9.63 which shows that its share price is higher 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. 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: Investment Valuation Ratios: Price/Book Value Ratio

After rising 3.7%, SanDisk (Nasdaq:SNDK) is currently trading at a share price of $46.85. The company's volume for the day so far is 2.8 million shares, consistent with its 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. 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. A company's price/earnings ratio (P/E ratio) provides a measure of how expensive or cheap a stock is. The P/E ratio for SNDK is 17.3, above the industry average of 11.83. Usually, if a stock has a high P/E ratio, it indicates that the market expects the company to grow earnings quickly in the future. 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: How To Find P/E And PEG Ratios

Lam (Nasdaq:LRCX) is trading at $32.54 per share, down 3.4%. So far today, 4.1 million shares of the company's stock have changed hands. This is more trading activity than there was yesterday. 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. Understanding investment valuation ratios allows an investor to assess the true value of an individual stock. 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. The debt ratio for LRCX is a low 35.9%. 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.

Nice Systems Ltd (Nasdaq:NICE) has increased to a share price of $32.23, a 3.4% rise. So far today, the company's volume is 132,738 shares, consistent with its current daily average. If a stock price makes a big move up or down, volume lets us know the significance of that move. Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. 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 NICE is 2.71, 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 compare P/S ratios for companies in the same industry, as ratios can vary quite widely for companies in different industries.

Cymer (Nasdaq:CYMI) has fallen 3.3% and is currently trading at $55.54 per share. The company is currently trading a volume of 92,470 shares. A stock's volume conveys how excited investors are about it. 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. As with most ratios, comparisons of company price/earnings to growth ratios (PEG ratios) are most appropriate for similar companies. PEG ratio for CYMI is consistent with the industry average at 3.32. 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. It is important to weigh current activity against historical performance when making any investment decisions. However, these fundamental metrics must be analyzed with historic data, industry information in addition to firm specific financial statements.

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