Filed Under: ,
Tickers in this Article: MUX, EXK, RGLD, AG, IAG, SA, SLW
The Nasdaq has risen 0.1%, the S&P 500 remains relatively unchanged and the Dow has climbed 0.1% so far today.

The Gold and Silver sector (SLV) is up 2.3% overall, and these are the biggest movers in the sector so far:
CompanyMarket CapPercentage Change
McEwen Mining (NYSE:MUX)$844.9 million+3.9%
Endeavour Silver Corp (NYSE:EXK)$985.9 million+2.8%
Royal Gold (Nasdaq:RGLD)$5.5 billion+2.1%
First Majestic (NYSE:AG)$2.6 billion+1.8%
IAMGOLD Corporation (NYSE:IAG)$5.86 billion+1.5%
Seabridge Gold, Inc (NYSE:SA)$846.9 million+1.5%
Silver Wheaton Corp (NYSE:SLW)$13.77 billion+1.3%
Beginner's Guide To Stockcharts.com

After an increase of 3.9%, McEwen Mining (NYSE:MUX) has reached a current price of $4.77. So far today, the company's volume is one million shares. This is 0.3 times the current daily average. 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. The price/book value ratio provides a way of evaluating whether a stock is relatively cheap or expensive. MUX's P/B ratio of 1.01 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. 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: Using The Price-To-Book Ratio To Evaluate Companies

Endeavour Silver Corp (NYSE:EXK) is currently trading at $10.22 per share, a 2.8% increase. The company's volume is currently 575,409 shares for the day, consistent with the volume from yesterday lighter than yesterday's volume of 1.3 million 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. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. The price/sales ratio measures a company's stock market value by its total revenues or alternatively, a company's price per share by its revenue per share. EXK has a high P/S ratio of 4.89. This could be a good sign if the share price increases. 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.

Royal Gold (Nasdaq:RGLD) has moved up 2.1% and is currently trading at $95.43 per share. The company's volume for the day so far is 286,126 shares. 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. 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 debt ratio measures the leverage of a company, and a company's leverage is a good way to assess risk. RGLD's debt ratio of 22.5% 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. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.

First Majestic (NYSE:AG) has increased to a share price of $22.95, a 1.8% rise. With 323,360 shares changing hands so far today, the company's volume is 0.3 times its average over the past three months. Volume is an important indicator because it indicates how significant a price shift 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. 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. AG has a debt-equity ratio of 5%, which is on the low side. 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. This easy-to-calculate ratio provides a general indication of a company's equity-liability relationship and is helpful to investors looking for a quick take on a company's leverage.

IAMGOLD Corporation (NYSE:IAG) is at $15.83 per share after an increase of 1.5%. This morning, the company's volume is 2.4 million shares. This is 0.8 times its current daily average. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. 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. Perhaps one of the most widely-used stock analysis tools is the price-to-earnings ratio, or P/E. IAG has a P/E ratio of 16.9. High P/E stocks could be "growth" stocks, while low PE stocks may be "value" stocks. SEE: How To Use The P/E Ratio And PEG To Tell The Future Of A Stock

Seabridge Gold, Inc (NYSE:SA) is up 1.5% to reach a current price of $19.78 per share. So far today, the company's volume is 201,262 shares, on pace to reach yesterday's volume of 482,034 shares. 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. A company's value as an investment is more easily 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 is one of the more common methods of determining whether a stock is fairly valued. SA has a P/B ratio of 3.92 which shows that its share price is higher 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. 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: How Buybacks Warps The Price-To-Book Ratio

After an increase of 1.3%, Silver Wheaton Corp (NYSE:SLW) has reached a current price of $39.42. The company is currently trading a volume of 2.1 million shares. If a stock price makes a big move up or down, volume lets us know the significance of that move. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. Dividend yield measures the income that a stock will generate for an investor. SLW has a low dividend yield of 1%. This may indicate that the company's stock is overpriced. A higher dividend yield may indicate a risk of a fall in the price of the security, or a cut in the level of dividend payments, either of which would have the effect of dropping future returns. SEE: Dividend Yield For The Downturn

The Bottom Line The nature of the market is such that stocks will have good days and bad days. 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.

comments powered by Disqus

Trading Center