It's been a good morning for the market. The Nasdaq has climbed 2.2%; the S&P 500 has moved up 2%; and the Dow is up 1.8%.
Underperforming the market overall, the Services sector (IYC) is up 1.7%, and these are its current biggest movers:
|Company||Market Cap||Percentage Change|
|COMSCORE, Inc. (Nasdaq:SCOR)||$544.3 million||-22.3%|
|Stantec Inc. (USA) (NYSE:STN)||$1.29 billion||+13.3%|
|Dolby Laboratories, Inc. (NYSE:DLB)||$3.83 billion||-13.2%|
|CEC Entertainment, Inc. (NYSE:CEC)||$611.9 million||-10.5%|
|eLong, Inc. (ADR) (Nasdaq:LONG)||$935.6 million||-6.8%|
|Chipotle Mexican Grill, Inc. (NYSE:CMG)||$8.99 billion||+5%|
|Jones Lang LaSalle Incorporated (NYSE:JLL)||$2.83 billion||+4.8%|
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Shares of COMSCORE (Nasdaq:SCOR) are currently trading at $12, a steep decline of 22.3%. So far this morning, 760,940 shares have changed hands. This is 6.3 times its current daily average. When a stock price moves up or down, watching the volume is a good way of identifying how significant that shift is. 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. If the price/book value ratio of a stock is high, it may indicate that the stock is expensive, while a lower ratio may indicate that the stock is a bargain. The P/B ratio for SCOR is 2.17, 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: Investment Valuation Ratios: Price/Book Value Ratio
Stantec Inc (NYSE:STN) has soared 13.3% to reach a current price of $31.90 per share. The company's volume is currently 9,119 shares for the day, which is more trading activity than there was yesterday. The trading volume for a stock indicates the level of investor interest. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. The dividend yield is measured by taking the annual dividends per share and dividing that number by the stock price. STN's dividend yield is 2.1%. A higher dividend yield may indicate a risk of a fall in the price of the security, or a cut in the level of dividend payments, either of which would have the effect of dropping future returns. SEE: Investment Valuation Ratios: Dividend Yield
After a precipitous drop of 13.2%, Dolby Laboratories (NYSE:DLB) is now trading at a share price of $31.07. The company is currently trading a volume of 1.8 million shares. Volume is an important indicator because it indicates how significant a price shift is. Understanding investment valuation ratios allows an investor to assess the true value of an individual stock. In a nutshell, the price/sales ratio shows how much Wall Street values every dollar of the company's sales. The P/S ratio for DLB is 4.28, which is relatively high. This could be a good sign if the share price increases. 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.
CEC Entertainment (NYSE:CEC) is currently trading at $29.94 per share, after a steep drop of 10.5%. At 247,558 shares, the company's volume so far today is 2.3 times its current three-month average. 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. 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 gives users a quick measure of the amount of debt that the company has on its balance sheets compared to its assets. CEC has a high debt ratio of 80.2%. This might mean that the company now has low borrowing capacity, which reduces it's financial flexibility. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.
eLong, Inc (Nasdaq:LONG) has fallen 6.8% and is currently trading at $12.72 per share. The company's volume for the day so far is 21,735 shares. This is 0.3 times the current daily average. If a stock price moves on high volume, this means that the change is a significant one. Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. Price/earnings ratios (P/E ratios) provide a measure of the relative value of a stock. LONG's P/E ratio of 62.9 is above the industry average of 29.91. 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: Can Investors Trust the P/E Ratio?
Chipotle Mexica (NYSE:CMG) has risen 5% to hit a current price of $297.95 per share. So far today, 574,627 shares have changed hands,. A stock's volume conveys how excited investors are about it. 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/earnings to growth (PEG) ratio divides a company's P/E ratio by its growth rate of earnings-per-share. PEG ratio for CMG is consistent with the industry average at 1.68. 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.
Jones Lang LaSalle (NYSE:JLL) has moved up 4.8% and is currently trading at $67.78 per share. The company's volume for the day so far is 105,019 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. 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 is one of the more common methods of determining whether a stock is fairly valued. JLL's stock is trading for more than its book value with a P/B ratio of 1.69. 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: How Buybacks Warps The Price-To-Book Ratio
The Bottom Line On any given day, a particular stock may see positive or negative change in its share price. Paying close attention to the previous ratios will help you identify key times to adjust your strategy. 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.