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Tickers in this Article: CONN, STRA, NFLX, TRIP, HHC, WPC, ROST
It's been a good morning for the market. The Nasdaq has climbed 0.7%; the S&P 500 has moved up 1%; and the Dow is up 1.1%.

Outperforming the market overall, the Services sector (IYC) is up 0.7% and its biggest movers so far today are:
CompanyMarket CapPercentage Change
CONN\'S (Nasdaq:CONN)$718.6 million+8.2%
Strayer Education (Nasdaq:STRA)$764.1 million+4.5%
Netflix (Nasdaq:NFLX)$3.02 billion+3.4%
Tripadvisor (Nasdaq:TRIP)$4.69 billion-2.9%
Howard (NYSE:HHC)$2.7 billion+2.8%
W. P (NYSE:WPC)$1.98 billion-2.6%
Ross (Nasdaq:ROST)$14.46 billion+2.3%
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CONN'S (Nasdaq:CONN) is currently trading at $23.86 per share, a 8.2% increase. At 246,005 shares, the company's volume so far today is one times the average daily volume. 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. Perhaps one of the most widely-used stock analysis tools is the price-to-earnings ratio, or P/E. CONN has a P/E ratio of 40.8. A high or low P/E ratio is not good or bad in and of itself, but a company trading with a high P/E ratio must continue to post strong financial performance or its stock price is likely to fall. SEE: Can Investors Trust the P/E Ratio?

After rising 4.5%, Strayer Education (Nasdaq:STRA) is currently trading at a share price of $67.25. So far today, 53,143 shares have changed hands. 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. 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. PEG ratio for STRA is 1.26. Because of the adjustment for earnings growth rate, the PEG ratio is somewhat more useful than many formulas for comparing companies in different industries.

Netflix (Nasdaq:NFLX) is up 3.4% to reach a current price of $56.31 per share. The company's volume is currently 1.9 million shares for the day, consistent with its current three-month average. If a stock price makes a big move up or down, volume lets us know the significance of that move. 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 capitalization ratio is calculated by dividing long-term debt by the sum of long-term debt and shareholders' equity. NFLX's capitalization ratio is 36.8%. This ratio is considered to be one of the more meaningful of the "debt" ratios - it delivers the key insight into the use of leverage by a company.

Tripadvisor (Nasdaq:TRIP) is currently trading at a share price of $31.98, a 2.9% decline. So far today, 1.5 million shares of the company's stock have changed hands. This is on pace to reach yesterday's trading volume of three million shares. 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. Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. The debt ratio measures the leverage of a company, and a company's leverage is a good way to assess risk. TRIP has a low debt ratio of 47.2%. 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.

Howard (NYSE:HHC) has increased to a share price of $73.01, a 2.8% rise. At 63,726 shares, the company's volume so far today is 0.7 times its current daily average. 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. 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 debt-equity (D/E) ratio is a leverage ratio. HHC's debt-equity ratio of 29% is on the low end. Companies with low D/E ratios are more attractive to investors because they are better able to protect their business interests in times of decline. The D/E ratio percentage provides a much more dramatic perspective on a company's leverage position than the debt ratio percentage.

W. P (NYSE:WPC) has decreased to $47.74 per share, a 2.6% fall. The company's volume for the day so far is 469,030 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. 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. The P/B ratio for WPC is 2.77, indicating that the stock is trading for more than its book value. 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. 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

Ross (Nasdaq:ROST) has moved up 2.3% and is currently trading at $66.09 per share. At 1.1 million shares, the company's volume so far today is in keeping with the average volume over the past three months. Volume indicates the level of interest that investors have in a company at its current price. 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. A company's price/earnings ratio (P/E ratio) provides a measure of how expensive or cheap a stock is. The P/E ratio for ROST is 20.1, above the industry average of 15.4. A company with a high P/E ratio will eventually have to live up to the high rating by substantially increasing its earnings, or the price will need to drop. 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: The P/E Ratio: A Good Market-Timing Indicator

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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