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Shire Plc and Other Big Movers In Healthcare on September 20, 2012
On a bad day for the market, the Nasdaq is trading down 0.3%, the S&P 500 has fallen 0.3% and the Dow has slipped 0.1%. The healthcare sector is the category of stocks relating to medical and healthcare goods or services. This sector includes hospital management firms, health maintenance organizations (HMOs), biotechnology and a variety of medical products. Stocks in the healthcare sector are often considered to be defensive because the products and services are essential. Even during economic downturns, people will still require medical aid and medicine to overcome illness. Having a consistent demand for goods and services makes this sector less sensitive to business cycle fluctuations.
The Healthcare sector (XLV) is up 0.1% on a bad day for the market overall. The biggest movers in the sector are currently:
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After an increase of 7.8%, Questcor Pharmaceuticals (Nasdaq:QCOR) has reached a current price of $28.40. So far today, the company's volume is 17.3 million shares, 10.4 times the average daily volume. In technical analysis, trading volume is used to determine the strength of a market indicator. 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. A simple P/E ratio can reveal the stock's real market value and show how the valuation compares to its industry group or a benchmark like the S&P 500 Index. QCOR's P/E ratio is 12.8. From the investor's perspective, a stock with a lower ratio is relatively cheaper than a stock with a higher ratio. SEE: Understanding The P/E Ratio
Pacira Pharmaceuticals (Nasdaq:PCRX) is at $18.50 per share after an increase of 2.9%. The company's volume for the day so far is 176,597 shares. Volume indicates the level of interest that investors have in a company at its current price. 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 shows the proportion of assets that a company is financing through debt. PCRX has a debt ratio of 33.8%, which is fairly low. In other words, the company is less sensitive to changes in business or interest rates since less of its cash flow is dedicated to paying off loan expenses. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.
Taro Pharmaceutical (NYSE:TARO) has risen 2.7% and is currently trading at $46.67 per share. With 28,325 shares changing hands so far today, the company's volume is 1.1 times the average volume over the last three months. When a stock price moves up or down, watching the volume is a good way of identifying how significant that shift is. Understanding investment valuation ratios allows an investor to assess the true value of an individual stock. The capitalization ratio is calculated by dividing long-term debt by the sum of long-term debt and shareholders' equity. TARO has a low capitalization ratio of 3.8%. A very low capitalization ratio might be a sign that the company is stagnating and reducing the potential earnings for shareholders. 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.
Abaxis (Nasdaq:ABAX) has decreased to $36.16 per share, a 2.4% fall. So far today, 39,299 shares of the company's stock have changed hands. This is about the same trading activity as there was yesterday. If a stock price moves on high volume, this means that the change is a significant one. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. Using price/earnings ratios (P/E ratios) does not give an indication of whether or not an individual company's ratio is reasonable, a shortcoming that can be corrected by using the price/earnings to growth ratio (PEG ratio). PEG ratio for ABAX is 3.99. 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.
Increasing 2%, ICON plc (Nasdaq:ICLR) is trading at $24.80 per share. At 82,751 shares, the company's volume so far today is 0.4 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. 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 price/book value ratio is calculated by dividing the current stock price by the company's book value per share. ICLR's stock is trading for more than its book value with a P/B ratio of 2.17. 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. All else being equal, a stock with a low P/B value ratio is more attractive than a stock with a high ratio. SEE: Investment Valuation Ratios: Price/Book Value Ratio
Slipping 1.8%, Onyx Pharmaceuticals (Nasdaq:ONXX) is currently trading at $84.24 per share. So far today, 530,636 shares have changed hands. High volume indicates a lot of investor interest while low volume indicates the opposite. 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. ONXX has a P/E ratio of 286.1. 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: How To Find P/E And PEG Ratios
Shire Plc (Nasdaq:SHPG) is currently trading at a share price of $88.91, a 1.8% decline. The company's volume is currently 408,736 shares for the day, 1.5 times its average over the past three months. The trading volume for a stock indicates the level of investor interest. Investment valuation ratios can be very useful in estimating whether a stock price is too high, reasonable or a bargain investment opportunity. The easy-to-calculate debt ratio is helpful to investors looking for a quick take on the leverage for a company. The debt ratio for SHPG is a low 48.6%. This indicates that the company engages in conservative financing with opportunities to borrow in the future at no significant risk. 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.
The Bottom Line No matter the economic climate, Wall Street will always have stocks that make major moves each week. 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.
The Healthcare sector (XLV) is up 0.1% on a bad day for the market overall. The biggest movers in the sector are currently:
| Company | Market Cap | Percentage Change |
| Questcor Pharmaceuticals (Nasdaq:QCOR) | $3.01 billion | +7.8% |
| Pacira Pharmaceuticals (Nasdaq:PCRX) | $582.6 million | +2.9% |
| Taro Pharmaceutical (NYSE:TARO) | $1.95 billion | +2.7% |
| Abaxis (Nasdaq:ABAX) | $805.1 million | -2.4% |
| ICON plc (Nasdaq:ICLR) | $1.45 billion | +2% |
| Onyx Pharmaceuticals (Nasdaq:ONXX) | $5.44 billion | -1.8% |
| Shire Plc (Nasdaq:SHPG) | $17.1 billion | -1.8% |
After an increase of 7.8%, Questcor Pharmaceuticals (Nasdaq:QCOR) has reached a current price of $28.40. So far today, the company's volume is 17.3 million shares, 10.4 times the average daily volume. In technical analysis, trading volume is used to determine the strength of a market indicator. 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. A simple P/E ratio can reveal the stock's real market value and show how the valuation compares to its industry group or a benchmark like the S&P 500 Index. QCOR's P/E ratio is 12.8. From the investor's perspective, a stock with a lower ratio is relatively cheaper than a stock with a higher ratio. SEE: Understanding The P/E Ratio
Pacira Pharmaceuticals (Nasdaq:PCRX) is at $18.50 per share after an increase of 2.9%. The company's volume for the day so far is 176,597 shares. Volume indicates the level of interest that investors have in a company at its current price. 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 shows the proportion of assets that a company is financing through debt. PCRX has a debt ratio of 33.8%, which is fairly low. In other words, the company is less sensitive to changes in business or interest rates since less of its cash flow is dedicated to paying off loan expenses. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.
Taro Pharmaceutical (NYSE:TARO) has risen 2.7% and is currently trading at $46.67 per share. With 28,325 shares changing hands so far today, the company's volume is 1.1 times the average volume over the last three months. When a stock price moves up or down, watching the volume is a good way of identifying how significant that shift is. Understanding investment valuation ratios allows an investor to assess the true value of an individual stock. The capitalization ratio is calculated by dividing long-term debt by the sum of long-term debt and shareholders' equity. TARO has a low capitalization ratio of 3.8%. A very low capitalization ratio might be a sign that the company is stagnating and reducing the potential earnings for shareholders. 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.
Abaxis (Nasdaq:ABAX) has decreased to $36.16 per share, a 2.4% fall. So far today, 39,299 shares of the company's stock have changed hands. This is about the same trading activity as there was yesterday. If a stock price moves on high volume, this means that the change is a significant one. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. Using price/earnings ratios (P/E ratios) does not give an indication of whether or not an individual company's ratio is reasonable, a shortcoming that can be corrected by using the price/earnings to growth ratio (PEG ratio). PEG ratio for ABAX is 3.99. 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.
Increasing 2%, ICON plc (Nasdaq:ICLR) is trading at $24.80 per share. At 82,751 shares, the company's volume so far today is 0.4 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. 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 price/book value ratio is calculated by dividing the current stock price by the company's book value per share. ICLR's stock is trading for more than its book value with a P/B ratio of 2.17. 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. All else being equal, a stock with a low P/B value ratio is more attractive than a stock with a high ratio. SEE: Investment Valuation Ratios: Price/Book Value Ratio
Slipping 1.8%, Onyx Pharmaceuticals (Nasdaq:ONXX) is currently trading at $84.24 per share. So far today, 530,636 shares have changed hands. High volume indicates a lot of investor interest while low volume indicates the opposite. 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. ONXX has a P/E ratio of 286.1. 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: How To Find P/E And PEG Ratios
Shire Plc (Nasdaq:SHPG) is currently trading at a share price of $88.91, a 1.8% decline. The company's volume is currently 408,736 shares for the day, 1.5 times its average over the past three months. The trading volume for a stock indicates the level of investor interest. Investment valuation ratios can be very useful in estimating whether a stock price is too high, reasonable or a bargain investment opportunity. The easy-to-calculate debt ratio is helpful to investors looking for a quick take on the leverage for a company. The debt ratio for SHPG is a low 48.6%. This indicates that the company engages in conservative financing with opportunities to borrow in the future at no significant risk. 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.
The Bottom Line No matter the economic climate, Wall Street will always have stocks that make major moves each week. 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.
by
Investopedia Staff
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