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Tickers in this Article: CIG, CPN, NRG, ELP, NRGM, EIX, SRE
The market is doing well so far today. The Nasdaq is up 0.6%; the S&P 500 has moved up 0.4%; and the Dow has climbed 0.3%. The utilities sector is a category of stocks for utilities such as gas and power. It contains companies such as electric, gas and water firms and integrated providers. Because utilities require significant infrastructure, these firms often carry large amounts of debt. With a high debt load, utilities companies become sensitive to changes in the interest rate. As interest rates rise or drop, the debt payments will increase or decrease. The utilities sector performs best when interest rates are falling or remain low.

Outperforming the market overall, the Utilities sector (XLU) is up 0.6% and its biggest movers so far today are:
CompanyMarket CapPercentage Change
Companhia Energetica Minas Gerais (NYSE:CIG)$10.21 billion-3.9%
Calpine (NYSE:CPN)$8.1 billion+2.8%
NRG (NYSE:NRG)$4.98 billion+2.5%
Companhia Paranaense de Energia (NYSE:ELP)$4.49 billion-2.3%
Inergy (NYSE:NRGM)$1.79 billion+1.9%
Edison (NYSE:EIX)$14.99 billion+1.6%
Sempra Energy (NYSE:SRE)$15.74 billion+1.4%
Broker Summary: Fidelity Online Brokerage

Falling 3.9%, Companhia Energetica Minas Gerais (NYSE:CIG) is currently at a share price of $11.50. So far today, the company's volume is 2.5 million shares. This is consistent with its current daily average. Volume is used to evaluate how meaningful the price movement of a stock is. 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. The dividend yield is measured by taking the annual dividends per share and dividing that number by the stock price. Dividend yield for CIG is 12.3%, which is fairly high. This could be a sign that the company is a "dividend trap" as companies with high dividends can be risky investments. High dividend yields are generally more important to value investors, investors in larger companies, and income oriented investors than they are to growth investors, investors in small cap stocks, and investors in new or emerging companies. SEE: Guide To Stock-Picking Strategies: Income Investing

Rising 2.8%, Calpine (NYSE:CPN) is currently trading at $17.84 per share. This morning, the company is trading a volume of 1.7 million shares. If a stock price makes a big move up or down, volume lets us know the significance of that move. 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. 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. CPN's stock is trading for more than its book value with a P/B ratio of 2.29. This may be a sign that the company is overvalued. 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

NRG (NYSE:NRG) is up 2.5% to reach a current price of $22.40 per share. So far today, the company's volume is 2.2 million shares, in keeping with the average volume over the past three months. When a stock price moves up or down, watching the volume is a good way of identifying how significant that shift is. Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. A price/sales ratio is derived by dividing stock market price by company sales. The P/S ratio for NRG is 0.45, which is relatively low. Coupled with high relative strength in the previous twelve months, a low P/S ratio is one of the most potent combinations of investment criteria. 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.

Companhia Paranaense de Energia (NYSE:ELP) has fallen 2.3% and is currently trading at $16.02 per share. So far today, 179,775 shares of the company's stock have changed hands. This is on pace to reach yesterday's trading volume of 301,061 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. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. The debt ratio shows the proportion of assets that a company is financing through debt. ELP has a low debt ratio of 37.4%. This indicates that the company engages in conservative financing with opportunities to borrow in the future at no significant risk. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.

Inergy (NYSE:NRGM) is currently trading at $24.31 per share, a 1.9% increase. At 12,515 shares, the company's volume so far today is consistent with its current daily average. In technical analysis, trading volume is used to determine the strength of a market indicator. 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 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 NRGM is 57%. The D/E ratio percentage provides a much more dramatic perspective on a company's leverage position than the debt ratio percentage.

Edison (NYSE:EIX) is at $46.72 per share after an increase of 1.6%. So far today, the company's volume is 736,387 shares. The trading volume for a stock indicates the level of investor interest. 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 is calculated by dividing long-term debt by the sum of long-term debt and shareholders' equity. EIX's capitalization ratio of 53.9% is relatively high. A company considered too highly leveraged (too much debt) may find its freedom of action restricted by its creditors and/or have its profitability hurt by high interest costs. 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.

After rising 1.4%, Sempra Energy (NYSE:SRE) is currently trading at a share price of $65.99. At 367,627 shares, the company's volume so far today is 0.3 times the current three-month average. Volume indicates the level of interest that investors have in a company at its current price. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. For investors primarily interested in the income a stock can generate, the dividend yield is an important determinant of how attractive a stock is. SRE has a dividend yield of 3.7%. To calculate the dividend yield, divide the level of dividends by the stock price; the higher the yield, the more attractive the security. SEE: Due Diligence On Dividends

The Bottom Line No matter the economic climate, Wall Street will always have stocks that make major moves each week. 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.

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