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Semiconductors Stocks Making Big Moves on July 3, 2012
On a good day for the market, the Nasdaq has increased 0.7%, the S&P 500 is trading up 0.7% and the Dow is up 0.6%.
The Semiconductors sector (XLK) is up 0.6%, underperforming the market overall. The biggest movers in the sector are currently:
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Increasing 4.2%, First Solar (Nasdaq:FSLR) is trading at $15.92 per share. The company's volume for the day so far is 2.5 million share, 0.4 times its current three-month average. 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. Margin ratios highlight companies that are worth further examination. FSLR has a gross profit margin of 38.9%. FSLR has negative operating and net profit margins. This is because the company reported net and operating losses in the most recent quarter.
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 price/sales ratio is used for spotting recovery situations or for double-checking that a company's growth has not become overvalued. FSLR has a P/S ratio of 0.81, on the low end. Highly levered companies are likely to have lower P/S ratios because the price aspect of this ratio only measures stock market valuation while sales is a function of both stock market and bond market capitalization. All things being equal, a low P/S ratio is good news for investors, while a very high one can be a warning sign.
After rising 3.7%, Veeco Instruments (Nasdaq:VECO) is currently trading at a share price of $36.88. This morning, the company is trading a volume of 261,364 shares. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. 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. The gross profit margin for VECO is 43.2%. Value investors, investors in distressed securities, and junk bond investors will probably pay more attention to the operating margin ratio. VECO's operating profit margin is 15%. A high net profit margin indicates a highly profitable company, and a low profit margin indicates the opposite. Net profit margin for the company is 10.6%.
Investors can make use of valuation ratios to estimate whether a stock is fairly valued. The debt ratio is calculated by dividing total liabilities by total assets. The debt ratio for VECO is a low 17.4%. 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.
Multi-Fineline Electronix (Nasdaq:MFLX) has risen 3.7% to hit a current price of $25.46 per share. The company's volume is currently 6,612 shares for the day, 0.1 times the current daily average. A stock's volume conveys how excited investors are about it. 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. MFLX has a low gross profit margin of 17.8%. Since gross profit margins tend to stay stable, sudden changes may indicate financial fraud, accounting irregularities or problems in the business. Compared with its gross profit margin, MFLX's operating profit margin of 6.3% and net profit margin of 4.4% are low.
Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. The price/book value ratio is one of the more common methods of determining whether a stock is fairly valued. MFLX's stock is trading for more than its book value with a P/B ratio of 1.38. 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. P/B value ratios are particularly useful to value investors, distressed or "vulture" investors, or any other investors purchasing beaten-down securities but are less useful to investors focused on growth stocks, purchasing IPOs, or investing in technology or other "asset-lite" companies. SEE: How Buybacks Warps The Price-To-Book Ratio
Mellanox (Nasdaq:MLNX) has moved up 3.5% and is currently trading at $74.88 per share. The company's volume is currently 282,981 shares. This is below yesterday's volume of 730,840 shares. Volume is an important indicator because it indicates how significant a price shift is. Margin analysis is a great way to understand the profitability of companies. The gross profit margin for MLNX is 72.6%. Operating margin for MLNX is 14.9% and net margin is 8.2%, both high relative to its gross margin.
It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. The price/earnings ratio is calculated by taking a stock price and dividing it by the earnings-per-share (EPS). Compared to the industry average of 14.53, MLNX's P/E ratio of 118.0 is quite high. This could mean that the market is expecting big things over the next few months or years. To determine the P/E ratio, an investor divides the market price of the stock by the earnings-per-share (EPS) of the stock. SEE: Investment Valuation Ratios: Price/Earnings Ratio
Universal (Nasdaq:PANL) is currently trading at $36.22 per share, a 2.7% increase. So far today, the company's volume is 125,167 shares, 0.1 times its average over the past 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. PANL has a gross profit margin of 85.7%, which is on the high end. Since gross profit margins tend to stay stable, sudden changes may indicate financial fraud, accounting irregularities or problems in the business. Investors in growth stocks or short-term traders may be less interested in the operating margin ratio. PANL has a negative operating margin of -12.3%. This is because the company reported a net operating loss in the most recent quarter. Ideally, a company's profit margin should be stable or rising; declining profit margin should be cause for concern or further investigation. The company's net margin of 21.5% is high relative to its gross profit margin. Investors in companies with high profit margins can be confident that even if sales dip slightly, profits will remain strong.
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. A price/sales ratio is derived by dividing stock market price by company sales. The P/S ratio for PANL is 26.28, 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.
ASM International (Nasdaq:ASMI) is at $39.78 per share after an increase of 2.3%. So far today, the company's volume is 5,239 shares. High volume indicates a lot of investor interest while low volume indicates the opposite. 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. ASMI's gross profit margin is 36.4%. The operating margin ratio is calculated by dividing operating income by sales and provides a measure of what percentage of a company's revenues is available to pay its fixed costs. Operating profit margin for ASMI is 7%. Net profit margin is a good tool for fundamental analysis and long-term investing but is less useful for technical analysts and short-term traders. Net margin is 10.1%.
Looking at a company's valuation ratios is a good way of getting a basic idea as to its value as an investment. The debt ratio measures the leverage of a company, and a company's leverage is a good way to assess risk. ASMI's debt ratio is 58.2%. 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.
EZchip (Nasdaq:EZCH) has increased to a share price of $39.64, a 1.8% rise. So far today, the company's volume is 89,432 shares, 0.3 times the average daily volume. 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. EZCH has a gross profit margin of 65.4%. A company's operating margin is calculated by dividing operating income by revenues. EZCH's operating profit margin is 31.5%. Tracking net profit margin over time for a single company can be a valuable tool for seeing how a business is developing. The company's net profit margin is 17.9%.
A company's investment value can be 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. When used consistently and uniformly, the price/earnings to growth (PEG) ratio is an essential tool that adds dimension to the price/earnings ratio, allows comparisons across diverse industries and is always on the lookout for value. EZCH has a PEG ratio of 4.32. 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 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. Keep in mind that all these ratios should be compared against historical numbers and industry information in order to get a more complete picture.
The Semiconductors sector (XLK) is up 0.6%, underperforming the market overall. The biggest movers in the sector are currently:
| Company | Market Cap | Percentage Change |
| First Solar (Nasdaq:FSLR) | $1.33 billion | +4.2% |
| Veeco Instruments Inc. (Nasdaq:VECO) | $1.38 billion | +3.7% |
| Multi-Fineline Electronix, Inc. (Nasdaq:MFLX) | $583.3 million | +3.7% |
| Mellanox Technologies, Ltd. (Nasdaq:MLNX) | $2.87 billion | +3.5% |
| Universal Display Corporation (Nasdaq:PANL) | $1.64 billion | +2.7% |
| ASM International N.V. (Nasdaq:ASMI) | $2.15 billion | +2.3% |
| EZchip Semiconductor Ltd. (Nasdaq:EZCH) | $1.09 billion | +1.8% |
Increasing 4.2%, First Solar (Nasdaq:FSLR) is trading at $15.92 per share. The company's volume for the day so far is 2.5 million share, 0.4 times its current three-month average. 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. Margin ratios highlight companies that are worth further examination. FSLR has a gross profit margin of 38.9%. FSLR has negative operating and net profit margins. This is because the company reported net and operating losses in the most recent quarter.
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 price/sales ratio is used for spotting recovery situations or for double-checking that a company's growth has not become overvalued. FSLR has a P/S ratio of 0.81, on the low end. Highly levered companies are likely to have lower P/S ratios because the price aspect of this ratio only measures stock market valuation while sales is a function of both stock market and bond market capitalization. All things being equal, a low P/S ratio is good news for investors, while a very high one can be a warning sign.
After rising 3.7%, Veeco Instruments (Nasdaq:VECO) is currently trading at a share price of $36.88. This morning, the company is trading a volume of 261,364 shares. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. 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. The gross profit margin for VECO is 43.2%. Value investors, investors in distressed securities, and junk bond investors will probably pay more attention to the operating margin ratio. VECO's operating profit margin is 15%. A high net profit margin indicates a highly profitable company, and a low profit margin indicates the opposite. Net profit margin for the company is 10.6%.
Investors can make use of valuation ratios to estimate whether a stock is fairly valued. The debt ratio is calculated by dividing total liabilities by total assets. The debt ratio for VECO is a low 17.4%. 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.
Multi-Fineline Electronix (Nasdaq:MFLX) has risen 3.7% to hit a current price of $25.46 per share. The company's volume is currently 6,612 shares for the day, 0.1 times the current daily average. A stock's volume conveys how excited investors are about it. 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. MFLX has a low gross profit margin of 17.8%. Since gross profit margins tend to stay stable, sudden changes may indicate financial fraud, accounting irregularities or problems in the business. Compared with its gross profit margin, MFLX's operating profit margin of 6.3% and net profit margin of 4.4% are low.
Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. The price/book value ratio is one of the more common methods of determining whether a stock is fairly valued. MFLX's stock is trading for more than its book value with a P/B ratio of 1.38. 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. P/B value ratios are particularly useful to value investors, distressed or "vulture" investors, or any other investors purchasing beaten-down securities but are less useful to investors focused on growth stocks, purchasing IPOs, or investing in technology or other "asset-lite" companies. SEE: How Buybacks Warps The Price-To-Book Ratio
Mellanox (Nasdaq:MLNX) has moved up 3.5% and is currently trading at $74.88 per share. The company's volume is currently 282,981 shares. This is below yesterday's volume of 730,840 shares. Volume is an important indicator because it indicates how significant a price shift is. Margin analysis is a great way to understand the profitability of companies. The gross profit margin for MLNX is 72.6%. Operating margin for MLNX is 14.9% and net margin is 8.2%, both high relative to its gross margin.
Universal (Nasdaq:PANL) is currently trading at $36.22 per share, a 2.7% increase. So far today, the company's volume is 125,167 shares, 0.1 times its average over the past 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. PANL has a gross profit margin of 85.7%, which is on the high end. Since gross profit margins tend to stay stable, sudden changes may indicate financial fraud, accounting irregularities or problems in the business. Investors in growth stocks or short-term traders may be less interested in the operating margin ratio. PANL has a negative operating margin of -12.3%. This is because the company reported a net operating loss in the most recent quarter. Ideally, a company's profit margin should be stable or rising; declining profit margin should be cause for concern or further investigation. The company's net margin of 21.5% is high relative to its gross profit margin. Investors in companies with high profit margins can be confident that even if sales dip slightly, profits will remain strong.
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. A price/sales ratio is derived by dividing stock market price by company sales. The P/S ratio for PANL is 26.28, 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.
ASM International (Nasdaq:ASMI) is at $39.78 per share after an increase of 2.3%. So far today, the company's volume is 5,239 shares. High volume indicates a lot of investor interest while low volume indicates the opposite. 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. ASMI's gross profit margin is 36.4%. The operating margin ratio is calculated by dividing operating income by sales and provides a measure of what percentage of a company's revenues is available to pay its fixed costs. Operating profit margin for ASMI is 7%. Net profit margin is a good tool for fundamental analysis and long-term investing but is less useful for technical analysts and short-term traders. Net margin is 10.1%.
Looking at a company's valuation ratios is a good way of getting a basic idea as to its value as an investment. The debt ratio measures the leverage of a company, and a company's leverage is a good way to assess risk. ASMI's debt ratio is 58.2%. 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.
EZchip (Nasdaq:EZCH) has increased to a share price of $39.64, a 1.8% rise. So far today, the company's volume is 89,432 shares, 0.3 times the average daily volume. 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. EZCH has a gross profit margin of 65.4%. A company's operating margin is calculated by dividing operating income by revenues. EZCH's operating profit margin is 31.5%. Tracking net profit margin over time for a single company can be a valuable tool for seeing how a business is developing. The company's net profit margin is 17.9%.
A company's investment value can be 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. When used consistently and uniformly, the price/earnings to growth (PEG) ratio is an essential tool that adds dimension to the price/earnings ratio, allows comparisons across diverse industries and is always on the lookout for value. EZCH has a PEG ratio of 4.32. 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 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. Keep in mind that all these ratios should be compared against historical numbers and industry information in order to get a more complete picture.
by
Investopedia Staff
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