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Semiconductors Stocks Making Big Moves on July 9, 2012
The market has been slipping so far today. The Nasdaq has declined 0.3%; the S&P 500 has decreased 0.3%; and the Dow has fallen 0.4%.
The Semiconductors sector (XLK) is currently lagging behind the overall market, down 0.5%, and its current biggest movers are:
Broker Summary: Fidelity Online Brokerage
MEMC (NYSE:WFR) is currently trading at $2.53 per share, a 5% increase. The company is trading at a volume of 1.3 million shares. Yesterday, 3.2 million shares changed hands. 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. 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. WFR has a low gross profit margin of 18.8%. This may mean that the company is struggling to control production costs, or that a low amount of earnings is being generated from revenues. The operating and net profit margins for WFR are both negative. This is because the company reported net and operating losses in the most recent quarter.
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 debt ratio shows the proportion of assets that a company is financing through debt. WFR has a high debt ratio of 86.5%. As such, the company is highly leveraged and not highly liquid. 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.
OmniVision Technologies (Nasdaq:OVTI) is currently trading at a share price of $12.73, a 4% decline. So far today, the company's volume is 705,763 shares, 0.3 times the average daily volume. 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. 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. 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. OVTI has a debt-equity ratio of 6%, which is on the low side. This shows that the company's assets are financed primarily through equity. The D/E ratio percentage provides a much more dramatic perspective on a company's leverage position than the debt ratio percentage.
After a decline of 3.9%, EZchip (Nasdaq:EZCH) has hit a share price of $37.24. The company's volume for the day so far is 117,305 shares. 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. Margin analysis is a great way to understand the profitability of companies. EZCH has a gross profit margin of 65.4%. Investors in growth stocks or short-term traders may be less interested in the operating margin ratio. EZCH's operating profit margin is 31.5%. Comparing net profit margins for companies with similar business models or in similar industries can yield valuable information as to which business is actually performing better. The company has a net profit margin of 17.9%.
Investors can make use of valuation ratios to estimate whether a stock is fairly valued. The price/earnings to growth (PEG) ratio is calculated by dividing the price/earnings ratio by growth in earnings-per-share; the lower the PEG ratio, the more reasonably valued the security. EZCH has a PEG ratio of 4.18. Because of the adjustment for earnings growth rate, the PEG ratio is somewhat more useful than many formulas for comparing companies in different industries.
Cavium (Nasdaq:CAVM) has fallen 3.7% and is currently trading at $24.94 per share. So far today, the company's volume is 478,647 shares, 0.5 times the average volume over the last three months. When a stock price moves up or down, watching the volume is a good way of identifying how significant that shift is. 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. The gross profit margin for CAVM is 56.7%. CAVM's operating and net profit margins are both negative. This is because the company reported a net loss and net operating loss in the most recent quarter.
Looking at a company's valuation ratios is a good way of getting a basic idea as to its value as an investment. The price/sales ratio measures a company's stock market value by its total revenues or alternatively, a company's price per share by its revenue per share. The P/S ratio for CAVM is a high 6.16. This could be a good sign if the share price increases. A limitation of the P/S ratio is that the price component measures only stock market captialization, while sales are a function of the entire capital structure, potentially leading to wide differences between levered and unlevered companies.
Tessera Technologies (Nasdaq:TSRA) has moved up 2.3% and is currently trading at $15.34 per share. So far today, 140,153 shares of the company's stock have changed hands. This is below yesterday's volume of 295,716 shares. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. 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. Both TSRA's operating and net profit margins are negative. This is because the company reported net and operating losses in the most recent quarter.
Understanding investment valuation ratios allows the investor to assess the true value of an individual stock. 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. TSRA's stock is trading for more than its book value with a P/B ratio of 1.2. 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. 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
Altera (Nasdaq:ALTR) is down 2.2% to reach $32.02 per share. The company's volume is currently 1.2 million shares for the day, 0.4 times the average daily volume. Volume is an important indicator because it indicates how significant a price shift is. 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. ALTR has a gross profit margin of 71.5%. 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. ALTR has an operating profit margin of 30.4%. Net profit margins are those generated from all phases of a business, including taxes. Net profit margin for the company is 34.6%.
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. Dividend yield is a way to measure how much cash flow you are getting for each dollar invested in an equity position - in other words, how much "bang for your buck" you are getting from dividends. The dividend yield for ALTR is 1%, which is on the low end. A company with a low dividend yield may be a safer investment in the long run. Simply comparing the level of dividends that two stocks pay does not give a true reflection of which security is more attractive, so investors calculate the dividend yield in order to standardize dividend payments. SEE: Guide To Stock-Picking Strategies: Income Investing
At $31.92, Broadcom (Nasdaq:BRCM) has slipped 2%. The company is currently trading a volume of 2.3 million shares. A stock's volume conveys how excited investors are about it. 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. BRCM's gross profit margin is 53.2%. 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. With an operating profit margin of 2.7%, BRCM has a high one relative to its gross profit margin. A high operating margin indicates that a company has a greater ability to pay its fixed costs, which means that the company has greater financial flexibility and a greater margin of error should its business decline. 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. The company's net profit margin is 10.6%.
Valuation ratios allow the investor to make a quick determination as to a company's investment value. 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. BRCM has a low debt ratio of 28.1%. 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.
The Semiconductors sector (XLK) is currently lagging behind the overall market, down 0.5%, and its current biggest movers are:
| Company | Market Cap | Percentage Change |
| MEMC Electronic Materials, Inc. (NYSE:WFR) | $556.3 million | +5% |
| OmniVision Technologies, Inc. (Nasdaq:OVTI) | $700 million | -4% |
| EZchip Semiconductor Ltd. (Nasdaq:EZCH) | $1.09 billion | -3.9% |
| Cavium Inc (Nasdaq:CAVM) | $1.29 billion | -3.7% |
| Tessera Technologies, Inc. (Nasdaq:TSRA) | $778.4 million | +2.3% |
| Altera (Nasdaq:ALTR) | $10.56 billion | -2.2% |
| Broadcom (Nasdaq:BRCM) | $17.95 billion | -2% |
MEMC (NYSE:WFR) is currently trading at $2.53 per share, a 5% increase. The company is trading at a volume of 1.3 million shares. Yesterday, 3.2 million shares changed hands. 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. 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. WFR has a low gross profit margin of 18.8%. This may mean that the company is struggling to control production costs, or that a low amount of earnings is being generated from revenues. The operating and net profit margins for WFR are both negative. This is because the company reported net and operating losses in the most recent quarter.
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 debt ratio shows the proportion of assets that a company is financing through debt. WFR has a high debt ratio of 86.5%. As such, the company is highly leveraged and not highly liquid. 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.
OmniVision Technologies (Nasdaq:OVTI) is currently trading at a share price of $12.73, a 4% decline. So far today, the company's volume is 705,763 shares, 0.3 times the average daily volume. 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. 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. 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. OVTI has a debt-equity ratio of 6%, which is on the low side. This shows that the company's assets are financed primarily through equity. The D/E ratio percentage provides a much more dramatic perspective on a company's leverage position than the debt ratio percentage.
After a decline of 3.9%, EZchip (Nasdaq:EZCH) has hit a share price of $37.24. The company's volume for the day so far is 117,305 shares. 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. Margin analysis is a great way to understand the profitability of companies. EZCH has a gross profit margin of 65.4%. Investors in growth stocks or short-term traders may be less interested in the operating margin ratio. EZCH's operating profit margin is 31.5%. Comparing net profit margins for companies with similar business models or in similar industries can yield valuable information as to which business is actually performing better. The company has a net profit margin of 17.9%.
Investors can make use of valuation ratios to estimate whether a stock is fairly valued. The price/earnings to growth (PEG) ratio is calculated by dividing the price/earnings ratio by growth in earnings-per-share; the lower the PEG ratio, the more reasonably valued the security. EZCH has a PEG ratio of 4.18. Because of the adjustment for earnings growth rate, the PEG ratio is somewhat more useful than many formulas for comparing companies in different industries.
Cavium (Nasdaq:CAVM) has fallen 3.7% and is currently trading at $24.94 per share. So far today, the company's volume is 478,647 shares, 0.5 times the average volume over the last three months. When a stock price moves up or down, watching the volume is a good way of identifying how significant that shift is. 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. The gross profit margin for CAVM is 56.7%. CAVM's operating and net profit margins are both negative. This is because the company reported a net loss and net operating loss in the most recent quarter.
Looking at a company's valuation ratios is a good way of getting a basic idea as to its value as an investment. The price/sales ratio measures a company's stock market value by its total revenues or alternatively, a company's price per share by its revenue per share. The P/S ratio for CAVM is a high 6.16. This could be a good sign if the share price increases. A limitation of the P/S ratio is that the price component measures only stock market captialization, while sales are a function of the entire capital structure, potentially leading to wide differences between levered and unlevered companies.
Tessera Technologies (Nasdaq:TSRA) has moved up 2.3% and is currently trading at $15.34 per share. So far today, 140,153 shares of the company's stock have changed hands. This is below yesterday's volume of 295,716 shares. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. 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. Both TSRA's operating and net profit margins are negative. This is because the company reported net and operating losses in the most recent quarter.
Understanding investment valuation ratios allows the investor to assess the true value of an individual stock. 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. TSRA's stock is trading for more than its book value with a P/B ratio of 1.2. 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. 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
Altera (Nasdaq:ALTR) is down 2.2% to reach $32.02 per share. The company's volume is currently 1.2 million shares for the day, 0.4 times the average daily volume. Volume is an important indicator because it indicates how significant a price shift is. 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. ALTR has a gross profit margin of 71.5%. 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. ALTR has an operating profit margin of 30.4%. Net profit margins are those generated from all phases of a business, including taxes. Net profit margin for the company is 34.6%.
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. Dividend yield is a way to measure how much cash flow you are getting for each dollar invested in an equity position - in other words, how much "bang for your buck" you are getting from dividends. The dividend yield for ALTR is 1%, which is on the low end. A company with a low dividend yield may be a safer investment in the long run. Simply comparing the level of dividends that two stocks pay does not give a true reflection of which security is more attractive, so investors calculate the dividend yield in order to standardize dividend payments. SEE: Guide To Stock-Picking Strategies: Income Investing
At $31.92, Broadcom (Nasdaq:BRCM) has slipped 2%. The company is currently trading a volume of 2.3 million shares. A stock's volume conveys how excited investors are about it. 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. BRCM's gross profit margin is 53.2%. 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. With an operating profit margin of 2.7%, BRCM has a high one relative to its gross profit margin. A high operating margin indicates that a company has a greater ability to pay its fixed costs, which means that the company has greater financial flexibility and a greater margin of error should its business decline. 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. The company's net profit margin is 10.6%.
Valuation ratios allow the investor to make a quick determination as to a company's investment value. 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. BRCM has a low debt ratio of 28.1%. 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.
by
Investopedia Staff
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