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Siemens AG Among Technology's Biggest Movers on September 11, 2012
The market is on the rise this morning. The Nasdaq has moved up 0.3%; the S&P 500 is trading up 0.6%; and the Dow has risen 0.7%. The technology sector is a category of stocks relating to the research, development and/or distribution of technologically based goods and services. This sector contains businesses revolving around the manufacturing of electronics, creation of software, computers or products and services relating to information technology. The technology sector offers a wide arrange of products and services for both customers and other businesses. Consumer goods like personal computers, stereos and televisions are continually improved and upgraded, offering the latest technology to all users. Businesses receive information and services from software and database systems, which allow the companies to make strategic business decisions.
Outperforming the market overall, the Technology sector (XLK) is up 0.7% and its biggest movers so far today are:
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M\x2FA-COM Technology Solutions (Nasdaq:MTSI) is at a share price of $10.63 after a sharp decline of 11.2%. The company's volume for the day so far is 179,474 shares, 2.3 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. 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, 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. MTSI has a P/B ratio of 2.67 which shows that its share price is higher than its book value. 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. P/B has its shortcomings but is still widely used as a valuation metric, more relevant for use by investors looking at capital-intensive or finance-related businesses, such as banks; book value does not carry much meaning for service-based firms with few tangible assets. SEE: Using The Price-To-Book Ratio To Evaluate Companies
Tibco Software (Nasdaq:TIBX) is down 8.8% to reach $29.45 per share. So far today, the company's volume is 5.5 million shares. 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. The price/sales ratio measures a company's stock market price by its revenues. The P/S ratio for TIBX is 4.36, which is relatively high. In young companies, a high P/S ratio is a sign of sales growth that is expected to turn into earnings and cash flow. It is important to compare P/S ratios for companies in the same industry, as ratios can vary quite widely for companies in different industries.
FactSet Research Systems (NYSE:FDS) has risen 3.5% to hit a current price of $98.72 per share. The company's volume is currently 395,758 shares for the day, 1.4 times its current daily average. A stock's volume conveys how excited investors are about it. 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 debt ratio shows the proportion of assets that a company is financing through debt. FDS' debt ratio of 19.3% is on the low side. 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.
SINA Corporation (Nasdaq:SINA) has risen 3% and is currently trading at $63.95 per share. The company's volume for the day so far is 936,407 shares. This is on pace to reach yesterday's trading volume of 2.1 million shares. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. The price/book value ratio is one of the more common methods of determining whether a stock is fairly valued. The P/B ratio for SINA is 3.75, indicating that the stock is trading for more than its book value. This may be a sign that the company is overvalued. To put things in perspective, should be made among companies in the same industry rather than across industries. SEE: Investment Valuation Ratios: Price/Book Value Ratio
Slipping 2.8%, Unisys (NYSE:UIS) is currently trading at $21.51 per share. So far today, the company's volume is 172,008 shares, 0.4 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 a 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. Looking at a company's valuation ratios is a good way of getting a basic idea as to its value as an investment. 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. The P/S ratio for UIS is 0.22, which is relatively low. Low P/S ratios can indicate unrecognized value potential - so long as other criteria like high profit margins, low debt levels and growth prospects are in place. 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.
Mellanox (Nasdaq:MLNX) has increased to a share price of $104.27, a 2.6% rise. So far today, 1.1 million shares have changed hands. Volume indicates the level of interest that investors have in a company at its current price. Understanding investment valuation ratios allows an investor to assess the true value of an individual stock. The easy-to-calculate debt ratio is helpful to investors looking for a quick take on the leverage for a company. MLNX has a low debt ratio of 18%. 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.
Siemens AG (NYSE:SI) is up 2.2% to reach a current price of $100.70 per share. At 494,604 shares, the company's volume so far today is 0.7 times the average daily volume. If a stock price makes a big move up or down, volume lets us know the significance of that move. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. To a large degree, the debt-equity (D/E) ratio provides another vantage point on a company's leverage position, in this case, comparing total liabilities to shareholders' equity, as opposed to total assets in the debt ratio. SI's D/E ratio is 65%. The D/E ratio is not a pure measurement of a company's debt because it includes operational liabilities in total liabilities.
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.
Outperforming the market overall, the Technology sector (XLK) is up 0.7% and its biggest movers so far today are:
| Company | Market Cap | Percentage Change |
| M\x2FA-COM Technology Solutions (Nasdaq:MTSI) | $542.7 million | -11.2% |
| Tibco Software (Nasdaq:TIBX) | $5.23 billion | -8.8% |
| FactSet Research Systems (NYSE:FDS) | $4.24 billion | +3.5% |
| SINA Corporation (Nasdaq:SINA) | $4.12 billion | +3% |
| Unisys (NYSE:UIS) | $972.8 million | -2.8% |
| Mellanox (Nasdaq:MLNX) | $4.23 billion | +2.6% |
| Siemens AG (NYSE:SI) | $86.62 billion | +2.2% |
M\x2FA-COM Technology Solutions (Nasdaq:MTSI) is at a share price of $10.63 after a sharp decline of 11.2%. The company's volume for the day so far is 179,474 shares, 2.3 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. 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, 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. MTSI has a P/B ratio of 2.67 which shows that its share price is higher than its book value. 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. P/B has its shortcomings but is still widely used as a valuation metric, more relevant for use by investors looking at capital-intensive or finance-related businesses, such as banks; book value does not carry much meaning for service-based firms with few tangible assets. SEE: Using The Price-To-Book Ratio To Evaluate Companies
Tibco Software (Nasdaq:TIBX) is down 8.8% to reach $29.45 per share. So far today, the company's volume is 5.5 million shares. 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. The price/sales ratio measures a company's stock market price by its revenues. The P/S ratio for TIBX is 4.36, which is relatively high. In young companies, a high P/S ratio is a sign of sales growth that is expected to turn into earnings and cash flow. It is important to compare P/S ratios for companies in the same industry, as ratios can vary quite widely for companies in different industries.
FactSet Research Systems (NYSE:FDS) has risen 3.5% to hit a current price of $98.72 per share. The company's volume is currently 395,758 shares for the day, 1.4 times its current daily average. A stock's volume conveys how excited investors are about it. 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 debt ratio shows the proportion of assets that a company is financing through debt. FDS' debt ratio of 19.3% is on the low side. 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.
Slipping 2.8%, Unisys (NYSE:UIS) is currently trading at $21.51 per share. So far today, the company's volume is 172,008 shares, 0.4 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 a 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. Looking at a company's valuation ratios is a good way of getting a basic idea as to its value as an investment. 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. The P/S ratio for UIS is 0.22, which is relatively low. Low P/S ratios can indicate unrecognized value potential - so long as other criteria like high profit margins, low debt levels and growth prospects are in place. 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.
Mellanox (Nasdaq:MLNX) has increased to a share price of $104.27, a 2.6% rise. So far today, 1.1 million shares have changed hands. Volume indicates the level of interest that investors have in a company at its current price. Understanding investment valuation ratios allows an investor to assess the true value of an individual stock. The easy-to-calculate debt ratio is helpful to investors looking for a quick take on the leverage for a company. MLNX has a low debt ratio of 18%. 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.
Siemens AG (NYSE:SI) is up 2.2% to reach a current price of $100.70 per share. At 494,604 shares, the company's volume so far today is 0.7 times the average daily volume. If a stock price makes a big move up or down, volume lets us know the significance of that move. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. To a large degree, the debt-equity (D/E) ratio provides another vantage point on a company's leverage position, in this case, comparing total liabilities to shareholders' equity, as opposed to total assets in the debt ratio. SI's D/E ratio is 65%. The D/E ratio is not a pure measurement of a company's debt because it includes operational liabilities in total liabilities.
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.
by
Investopedia Staff
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