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Tickers in this Article: TMH, LULU, IIT, MMS, MFRM, DLTR, WTW
The market is having a bad day so far. The Nasdaq has decreased 1.5%; the S&P 500 has declined 0.9%; and the Dow is down 1%.

The Services sector (IYC) is currently ahead of the overall market, down only 1%, and its biggest movers are currently:
CompanyMarket CapPercentage Change
Team Health Holdings LLC (NYSE:TMH)$1.54 billion+8.2%
Lululemon Athletica inc. (Nasdaq:LULU)$6.59 billion-5.8%
PT Indosat Tbk (ADR) (NYSE:IIT)$2.34 billion+5.1%
MAXIMUS, Inc. (NYSE:MMS)$1.52 billion+4.2%
Mattress Firm Holding Corp (Nasdaq:MFRM)$915.1 million+4.2%
Dollar Tree (Nasdaq:DLTR)$12.41 billion-3.8%
Weight Watchers International, Inc. (NYSE:WTW)$2.75 billion+3.5%
Broker Summary: Charles Schwab Online Brokerage

Team Health (NYSE:TMH) is at $25.33 per share after an increase of 8.2%. At 946,451 shares, the company's volume so far today is 5.1 times the average daily volume. The trading volume for a stock indicates the level of investor interest. Margin analysis is a great way to understand the profitability of companies. TMH has a low gross profit margin of 18.3%. A low gross profit margin compared to competitors may be a sign that the company is under-pricing its products and/or services. Relative to its gross profit margin, TMH's operating profit margin of 5.7% and net profit margin of 3.4% are low.

Understanding investment valuation ratios allows the investor to assess the true value of an individual stock. The debt ratio shows the proportion of assets that a company is financing through debt. The debt ratio for TMH is 96.2%, which is relatively high. 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.

Currently trading at $58.26 per share, Lululemon Athletica (Nasdaq:LULU) has fallen 5.8%. So far today, the company's volume is 3.3 million shares. If a stock price makes a big move up or down, volume lets us know the significance of that move. 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. LULU has a gross profit margin of 59.2%. Operating profit gives investors an opportunity to do profit-margin comparisons between companies that do not issue a separate disclosure of their cost of goods sold figures (which are needed to do gross margin analysis). Operating profit margin for LULU is 25.6%. Net profit margin compares net income with sales. The company has a net profit margin of 17.9%.

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. 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. LULU has a P/B ratio of 12.56 which shows that its share price is higher than its book value. This may be a sign that the company is overvalued. A weakness of the P/B value ratio is that while the price component is easily determined by looking at the stock quote, the book value component is more difficult to estimate and more open to individual interpretation and analysis. SEE: How Buybacks Warps The Price-To-Book Ratio

PT Indosat Tbk (NYSE:IIT) has risen 5.1% and is currently trading at $22.66 per share. The company's volume for the day so far is 2,493 share, 0.7 times its average over the past three months. 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. Dividend yield measures the income that a stock will generate for an investor. IIT has a low dividend yield of 1.9%. 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

MAXIMUS (NYSE:MMS) is currently trading at $46.59 per share, a 4.2% increase. The company's volume is currently 272,798 shares. Yesterday's volume was only 144,230 shares. When a stock price moves up or down, watching the volume is a good way of identifying how significant that shift is. Margin ratios highlight companies that are worth further examination. MMS' gross profit margin is 29.1%. MMS has an operating profit margin of 11.3% and a net profit margin of 8%, both low compared to its gross profit margin.

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. In a nutshell, the price/sales ratio shows how much Wall Street values every dollar of the company's sales. MMS' P/S ratio of 1.42 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. 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.

After an increase of 4.2%, Mattress (Nasdaq:MFRM) has reached a current price of $28.23. The company's volume is currently 164,398 shares for the day, 0.4 times its current daily average. Volume is used to evaluate how meaningful the price movement of a stock is. 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 capitalization (not to be confused with its market capitalization) is the term used to describe the makeup of a company's permanent or long-term capital, which consists of both long-term debt and shareholders' equity. The capitalization ratio for MFRM is 49%. 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.

Falling 3.8%, Dollar Tree (Nasdaq:DLTR) is currently at a share price of $51.46. The company is currently trading a volume of two million shares. High volume indicates a lot of investor interest while low volume indicates the opposite. 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. The gross profit margin for DLTR is 38.3%. Operating margin is determined by taking operating income (income minus variable expenses) and dividing it by sales. DLTR has an operating profit margin of 10.9%. Net profit margin is a good ratio for determining how a company is performing. The company's net profit margin is 7.4%.

Investors can make use of valuation ratios to estimate whether a stock is fairly valued. 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. DLTR has a debt-equity ratio of 18%, which is on the low side. A low D/E ratio may be a sign that the company is not taking advantage of leverage to increase its profits. The D/E ratio percentage provides a much more dramatic perspective on a company's leverage position than the debt ratio percentage.

Weight Watchers International (NYSE:WTW) has moved up 3.5% and is currently trading at $51.27 per share. So far today, the company's volume is 865,238 shares, 1.1 times the current three-month average. Volume is an important indicator because it indicates how significant a price shift 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. WTW has a gross profit margin of 57.8%. 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 WTW is 20.4%. A high net profit margin indicates a highly profitable company, and a low profit margin indicates the opposite. Net margin is 15.7%.

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 easy-to-calculate debt ratio is helpful to investors looking for a quick take on the leverage for a company. WTW has a high debt ratio of 257.9%. This means that most of the company's assets are financed through debt. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.

The Bottom Line No matter the economic climate, Wall Street will always have stocks that make major moves each week. It is important to weigh current activity against historical performance when making any investment decisions. However, these fundamental metrics must be analyzed with historic data, industry information in addition to firm specific financial statements.

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