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Tickers in this Article: FSLR, VECO, CAVM, ROG, EZCH, SPWR, SWKS
Currently, the Nasdaq has been relatively flat, the S&P 500 is down 0.1% and the Dow is trading down 0.3%.

The Semiconductors sector (XLK) has risen 0.1% despite little change in the market overall. Currently, the biggest movers in the sector are:
CompanyMarket CapPercentage Change
First Solar (Nasdaq:FSLR).23 billion+7.8%
Veeco Instruments Inc. (Nasdaq:VECO).34 billion-4.1%
Cavium Inc (Nasdaq:CAVM).19 billion-3.9%
Rogers Corporation (NYSE:ROG)2.4 million-3.7%
EZchip Semiconductor Ltd. (Nasdaq:EZCH)3.5 million+2.9%
SunPower Corporation (Nasdaq:SPWR)7.8 million+2.9%
Skyworks Solutions Inc (Nasdaq:SWKS).09 billion-2.6%
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First Solar (Nasdaq:FSLR) has moved up 7.8% and is currently trading at $15.27 per share. This morning, the company is trading a volume of three million shares. Volume indicates the level of interest that investors have in a company at its current price. Margin analysis is a great way to understand the profitability of companies. FSLR has a gross profit margin of 38.9%. The operating and net profit margins for FSLR are both negative. This is because the company reported a net loss and net operating loss in the most recent quarter.

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 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. The capitalizion ratio of 20.1% is on the low end. A low capitalization ratio can signify a failure to leverage equity into investment, missing valuable opportunities for growth and expansion. A low level of debt and a healthy proportion of equity in a company's capital structure is an indication of financial fitness.

Veeco Instruments (Nasdaq:VECO) has decreased to $33.15 per share, a 4.1% fall. So far today, the company's volume is 341,618 shares, whereas yesterday, volume was only 290,623 shares. 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 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. Profit-margin ratios measure how much money a company squeezes from its total revenue or total sales. Investors can look at a company's gross profit margin, operating profit margin and net margin to understand a company's profitability. VECO's gross profit margin is 43.2%. The operating margin ratio can also be useful for tracking an individual company's performance across time, where an increasing ratio is good and a declining ratio may provide cause for concern that a company's business model is weakening. VECO has an operating profit margin of 15%. Because the business models of companies vary so widely, it can be difficult to compare net profit margin ratios for companies in different industries. Net profit margin for the company is 10.6%.

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 VECO is consistent with the industry average at 1.0. Because of the adjustment for earnings growth rate, the PEG ratio is somewhat more useful than many formulas for comparing companies in different industries.

Slipping 3.9%, Cavium (Nasdaq:CAVM) is currently trading at $22.94 per share. This morning, the company is trading a volume of 404,043 shares. This is 0.3 times the average volume over the last three months. In technical analysis, trading volume is used to determine the strength of a market indicator. Margin analysis tells us how effectively management can wring profits from sales and how much room a company has to withstand a downturn, fend off competition and make mistakes. CAVM has a gross profit margin of 56.7%. CAVM's operating and net profit margins are both negative. This is because the company reported net and operating losses in the most recent quarter.

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 price/book value ratio provides a way of evaluating whether a stock is relatively cheap or expensive. CAVM has a P/B ratio of 3.71 which shows that its share price is higher than its book value. This implies that investors expect management to create more value from a given set of assets and/or that the market value of the firm's assets is significantly higher than their accounting value. 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

Rogers (NYSE:ROG) is trading at $36.24 per share, down 3.7%. The company's volume is currently 66,056 shares for the day, consistent with its current daily average. The trading volume for a stock indicates the level of investor interest. Calculating the profit margin is a great way to gain insight into aspects of how well a company generates and retains money. Instead of measuring how much managers earn from assets, equity or invested capital, profit-margin ratios measure how far a company stretches its total revenue or total sales. ROG's gross profit margin is 37.1%. The operating margin ratio can vary widely across industries, so investors should focus on comparing companies from similar industries or with similar business models. Operating margin for ROG is -0.6%. This shows that the company reported a net operating loss in the most recent quarter. A high net profit margin indicates a highly profitable company, and a low profit margin indicates the opposite. Net margin is 4.8%.

Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. The price/sales ratio measures a company's stock market price by its revenues. The P/S ratio for ROG is 1.17, which is relatively high. 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.

After an increase of 2.9%, EZchip (Nasdaq:EZCH) has reached a current price of $33.21. So far today, 137,573 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. Profit-margin ratios help us to keep score, as measured over time, of management's ability to generate profits and manage costs and expenses. There are three key profit-margin ratios: gross profit margin, operating profit margin and net profit margin. EZCH has a gross profit margin of 65.4%. Operating margin provides a measure of a company's ability to pay its fixed costs such as interest on debt, particular if its business were to decline in the future. Operating profit margin for EZCH is 31.5%. Net profit margin is calculated by dividing net income by sales. The company's net profit margin is 17.9%.

Investment valuation ratios can be very useful in estimating whether a stock price is too high, reasonable or a bargain investment opportunity. The debt ratio measures the leverage of a company, and a company's leverage is a good way to assess risk. EZCH's debt ratio of 5.2% 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.

Rising 2.9%, SunPower (Nasdaq:SPWR) is currently trading at $4.59 per share. At 779,516 shares, the company's volume so far today is while it was two million shares yesterday. High volume indicates a lot of investor interest while low volume indicates the opposite. Profit-margin ratios can give investors deeper insight into management efficiency than earnings alone can provide. Gross profit margin, operating profit margin and net margin are commonly used margins. SPWR has a low gross profit margin of 13.5%. This may mean that the company is struggling to control production costs, or that a low amount of earnings is being generated from revenues. Both SPWR's operating and net profit margins are negative. This is because the company reported a net loss and net operating loss in the most recent quarter.

Investors can make use of valuation ratios to estimate whether a stock is fairly valued. The debt-equity (D/E) ratio is a measurement of how much suppliers, lenders, creditors and obligors have committed to the company versus what the shareholders have committed. The D/E ratio for SPWR is 56%. 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.

Currently trading at $26.11 per share, Skyworks Solutions (Nasdaq:SWKS) has fallen 2.6%. The company's volume for the day so far is 1.3 million shares. This is 0.5 times the current three-month average. Volume is an important indicator because it indicates how significant a price shift is. Margin ratios highlight companies that are worth further examination. SWKS has a gross profit margin of 47.7%. Operating profit measures how much cash the business throws off, and some consider it a more reliable measure of profitability since it is harder to manipulate with accounting tricks than net earnings. SWKS has an operating profit margin of 12%. Ideally, a company's profit margin should be stable or rising; declining profit margin should be cause for concern or further investigation. The company has a net profit margin of 13.6%.

Understanding investment valuation ratios allows the investor to assess the true value of an individual stock. A company's price/earnings ratio (P/E ratio) provides a measure of how expensive or cheap a stock is. SWKS has a P/E ratio of 24.6. 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

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. 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.

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