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Tickers in this Article: JOBS, NTES, JLL, PHI, PCLN, PNRA, ESI
On a bad day for the market, the Nasdaq has slipped 2%, the S&P 500 is trading down 1.7% and the Dow is down 1.3%.

The Services sector (IYC) is down 1.4%, outperforming the market overall. Currently, the biggest movers in the sector are:
CompanyMarket CapPercentage Change
51job, Inc. (ADR) (Nasdaq:JOBS)$1.3 billion-7.2%
NetEase.com Inc (ADR) (Nasdaq:NTES)$7.77 billion-5.1%
Jones Lang LaSalle Incorporated (NYSE:JLL)$3.05 billion-3.8%
Philippine Long Distance Telephone (ADR) (NYSE:PHI)$10.91 billion+3.4%
Priceline.com (Nasdaq:PCLN)$33.21 billion-2.5%
Panera Bread Co (Nasdaq:PNRA)$4.34 billion-2.1%
ITT Educational Services, Inc. (NYSE:ESI)$1.34 billion+1.8%
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51job, Inc (Nasdaq:JOBS) has fallen 7.2% and is currently trading at $42.30 per share. The company's volume is currently 134,076 shares for the day, whereas yesterday, volume was only 28,920 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. 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. JOBS has a gross profit margin of 72%. Investors trying to assess a company's ability to continue to pay its fixed expenses even if its business declines may want to evaluate the operating margin ratio. JOBS' operating profit margin is 36%. While ratios such as price/earnings (P/E) or price/book value look at the relative attractiveness of a stock, the net profit margin ratio focuses on company performance rather that stock market valuation. Net margin is 30.6%.

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. A company's price/earnings ratio (P/E ratio) provides a measure of how expensive or cheap a stock is. P/E ratio for JOBS is 20.4. A high P/E ratio indicates a stock that is expensive, while a low P/E ratio indicates a stock that is cheap. SEE: How To Use The P/E Ratio And PEG To Tell The Future Of A Stock

NetEase.com Inc (Nasdaq:NTES) has decreased to $56.68 per share, a 5.1% fall. So far today, 245,319 shares have changed hands. 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. 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. The gross profit margin for NTES is 73.9%. Operating margin can be an important ratio for some investors, particularly those investing in weaker companies or companies in cyclical industries. With an operating profit margin of 49.6%, NTES has a low one relative to its gross profit margin. Net profit margins are those generated from all phases of a business, including taxes. The company has a net profit margin of 44.9%.

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/earnings to growth (PEG) ratio divides a company's P/E ratio by its growth rate of earnings-per-share. NTES has a PEG ratio of 1.17, which is consistent with the industry average. Because of the adjustment for earnings growth rate, the PEG ratio is somewhat more useful than many formulas for comparing companies in different industries.

Jones Lang LaSalle (NYSE:JLL) is down 3.8% to reach $67.20 per share. At 60,410 shares, the company's volume so far today is 0.2 times the average volume over the last three months. A stock's volume conveys how excited investors are about it. 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 JLL is 1.68, indicating that the stock is trading for more than its book value. This may be a sign that the company is overvalued. P/B value comparisons should be made among companies in the same industry rather than across industries. SEE: How Buybacks Warps The Price-To-Book Ratio

Philippine Long Distance Telephone (NYSE:PHI) has increased to a share price of $60.40, a 3.4% rise. So far today, the company's volume is 66,306 shares. This is 0.5 times its current daily average. Volume is used to evaluate how meaningful the price movement of a stock is. There are many tools investors can use to evaluate a stock, including margins. Margins, quite simply, are earnings expressed as a ratio, or a percentage of sales, and this allows investors to compare the profitability of different companies, while net earnings, which are presented as an absolute number, cannot. PHI's gross profit margin of 95.8% is on the high side. This means that the company will have a lot of money left over to spend on other business operations, such as research and development or marketing. PHI's operating margin of 29.7% and net margin of 18.8% are high relative to its gross margin.

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. Dividend yield for PHI is 5.1%. A stock's dividend yield depends on the nature of a company's business, its posture in the marketplace (value or growth oriented), its earnings and cash flow, and its dividend policy. SEE: Investment Valuation Ratios: Dividend Yield

Priceline.com (Nasdaq:PCLN) is trading at $650.48 per share, down 2.5%. At 296,649 shares, the company's volume so far today is while it was 756,975 shares yesterday. In technical analysis, trading volume is used to determine the strength of a market indicator. Margin ratios highlight companies that are worth further examination. PCLN has a gross profit margin of 72.9%. All else being equal, investors should feel more confident investing in a company with a high operating margin than one with a low operating margin. Operating profit margin for PCLN is 23.3%. Net profit margin is a good ratio for determining how a company is performing. Net profit margin for the company is 24.7%.

Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. While measuring a price/earnings ratio (P/E ratio) is a popular valuation technique, the measure cannot be calculated for companies without earnings, so some investors analyze the price/sales ratio. PCLN's P/S ratio of 7.79 is on the high side. In young companies, a high P/S ratio is a sign of sales growth that is expected to turn into earnings and cash flow. All things being equal, a low P/S ratio is good news for investors, while a very high one can be a warning sign.

Falling 2.1%, Panera (Nasdaq:PNRA) is currently at a share price of $143.03. This morning, the company is trading a volume of 88,167 shares. When a stock price moves up or down, watching the volume is a good way of identifying how significant that shift is. Margin analysis is a great way to understand the profitability of companies. PNRA has a low gross profit margin of 23%. Since gross profit margins tend to stay stable, sudden changes may indicate financial fraud, accounting irregularities or problems in the business. Operating margin for PNRA is 13.5% and net margin is 7.6%, both low relative to its gross margin.

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 gives users a quick measure of the amount of debt that the company has on its balance sheets compared to its assets. PNRA has a low debt ratio of 33.3%. 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.

After an increase of 1.8%, ITT Educational Services (NYSE:ESI) has reached a current price of $56.53. With 94,160 shares changing hands so far today, the company's volume is 0.3 times the current three-month average. Volume is an important indicator in technical analysis as it is used to measure the worth of a market move. If the markets have made strong price move either up or down the perceived strength of that move depends on the volume for that period. The higher the volume during that price move the more significant the move. 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. ESI's gross profit margin is 64.2%. The operating profit margin indicates how much EBIT is generated per dollar of sales. ESI's operating profit margin is 29.4%. 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 19.4%.

Understanding investment valuation ratios allows the investor to assess the true value of an individual stock. Price/earnings ratios (P/E ratios) provide a measure of the relative value of a stock. ESI's P/E ratio of 5.3 falls below the industry average of 16.37. A low P/E might arise due to substantial inherent risk of the firm and its operations, poor return on equity, or improper valuation of the market. High P/E stocks could be "growth" stocks, while low PE stocks may be "value" stocks. SEE: How To Find P/E And PEG Ratios

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. 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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