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Tickers in this Article: KH, OSUR, SNY, QCOR, CRVL, WPI, ICUI
On a bad day for the market, the Nasdaq has fallen 0.8%, the S&P 500 is trading down 0.7% and the Dow has declined 0.7%. 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) is down 0.6%, outperforming the market overall. Currently, the biggest movers in the sector are:
CompanyMarket CapPercentage Change
China Kanghui Holdings (NYSE:KH)$590.9 million+21.3%
OraSure Technologies (Nasdaq:OSUR)$590.2 million+4.9%
Sanofi SA (NYSE:SNY)$117.64 billion-3.4%
Questcor Pharmaceuticals (Nasdaq:QCOR)$1.06 billion+3.4%
CorVel (Nasdaq:CRVL)$506 million-2.8%
Watson Pharmaceuticals, Inc (NYSE:WPI)$10.69 billion+2.6%
ICU Medical (Nasdaq:ICUI)$883.8 million-2.4%
Broker Summary: E-Trade Financial

After a big jump of 21.3%, China Kanghui Holdings (NYSE:KH) is trading at $30.45 per share. The company's volume for the morning is 1.2 million shares. This is 23.1 times the average daily volume. High volume indicates a lot of investor interest while low volume indicates the opposite. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. A price/sales ratio is derived by dividing stock market price by company sales. The P/S ratio for KH is a high 8.04. This could be a good sign if the share price increases. All things being equal, a low P/S ratio is good news for investors, while a very high one can be a warning sign.

Rising 4.9%, OraSure Technologies (Nasdaq:OSUR) is currently trading at $11.23 per share. So far today, 697,013 shares have changed hands, above yesterday's volume of 308,916 shares. If a stock price moves on high volume, this means that the change is a significant one. Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. The debt ratio measures the leverage of a company, and a company's leverage is a good way to assess risk. OSUR has a low debt ratio of 20.8%. 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.

Sanofi SA (NYSE:SNY) is currently trading at a share price of $42.98, a 3.4% decline. The company's volume for the day so far is one million 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. 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. 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. SNY has a low capitalization ratio of 15.4%. Low leverage is a significant balance sheet strength, a sign of a less risky investment. The capitalization ratio is one of the more meaningful debt ratios because it focuses on the relationship of debt liabilities as a component of a company's total capital base, which is the capital raised by shareholders and lenders.

Questcor Pharmaceuticals (Nasdaq:QCOR) is up 3.4% to reach a current price of $18.43 per share. At 4.9 million shares, the company's volume so far today is 0.3 times the current three-month average. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. While investment valuation ratios are useful tools in estimating the attractiveness of an investment, remember that it is important to look at a company's historical performance and compare the company ratios with its competitors and industry overall. The price/earnings ratio is calculated by taking a stock price and dividing it by the earnings-per-share (EPS). P/E ratio for QCOR is 8.7. From the investor's perspective, a stock with a lower ratio is relatively cheaper than a stock with a higher ratio. SEE: The P/E Ratio: A Good Market-Timing Indicator

CorVel (Nasdaq:CRVL) has decreased to $43.70 per share, a 2.8% fall. The company's volume for the day so far is 3,324 shares. This is 0.2 times its current daily average. 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. 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 CRVL is 4.27, 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. 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: Using The Price-To-Book Ratio To Evaluate Companies

Watson Pharmaceuticals, Inc (NYSE:WPI) has risen 2.6% and is currently trading at $85.85 per share. This morning, 803,226 shares have been traded, which is more trading activity than there was yesterday. Volume indicates the level of interest that investors have in a company at its current price. 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 price/sales ratio is used for spotting recovery situations or for double-checking that a company's growth has not become overvalued. WPI's P/S ratio of 1.71 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 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.

Falling 2.4%, ICU Medical (Nasdaq:ICUI) is currently at a share price of $60.43. So far today, the company's volume is 41,117 shares. 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 gives users a quick measure of the amount of debt that the company has on its balance sheets compared to its assets. ICUI has a debt ratio of 10.5%, which is fairly low. A low debt ratio means the company has more available cash flow. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.

The Bottom Line The nature of the market is such that stocks will have good days and bad days. Daily stock performance should be weighed against historical performance and put in context of the market overall. However, these fundamental metrics must be analyzed with historic data, industry information in addition to firm specific financial statements.

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