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Tickers in this Article: ARMH, MPWR, SWI, GME, FFIV, SINA, INFA
The Nasdaq has decreased 0.8%, the S&P 500 is down 0.5% and the Dow is down 0.7% on a bad morning for the market. 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.

The Technology sector (XLK) is down 0.7%, outperforming the market overall. Currently, the biggest movers in the sector are:
CompanyMarket CapPercentage Change
ARM Holdings plc (Nasdaq:ARMH)$12.5 billion-7.7%
Monolithic Power Systems (Nasdaq:MPWR)$760.8 million-7.3%
SolarWinds (NYSE:SWI)$4.07 billion+6.4%
GameStop (NYSE:GME)$2.49 billion+4.9%
F5 Networks (Nasdaq:FFIV)$7.7 billion-3.5%
SINA Corporation (Nasdaq:SINA)$3.73 billion+3.3%
Informatica (Nasdaq:INFA)$3.54 billion+2.8%
Broker Summary: TD Ameritrade Thinkorswim

ARM Holdings plc (Nasdaq:ARMH) is down 7.7% to reach $25.14 per share. So far today, the company's volume is 4.7 million shares, 3.7 times the average volume over the last three months. Volume indicates the level of interest that investors have in a company at its current price. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. When used consistently and uniformly, the price/earnings to growth (PEG) ratio is an essential tool that adds dimension to the price/earnings ratio, allows comparisons across diverse industries and is always on the lookout for value. ARMH has a PEG ratio of 3.19. Because of the adjustment for earnings growth rate, the PEG ratio is somewhat more useful than many formulas for comparing companies in different industries.

At $19.99, Monolithic Power Systems (Nasdaq:MPWR) has slipped 7.3%. So far today, the company's volume is 406,649 shares. Yesterday's volume was only 394,210 shares. If a stock price makes a big move up or down, volume lets us know the significance of that move. 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. One of the favorite tools of many value investors is analyzing price/book value ratios, as it provides a measure of the underlying value of a company's assets as compared to the valuation of its equity. MPWR's stock is trading for more than its book value with a P/B ratio of 2.62. 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

After rising 6.4%, SolarWinds (NYSE:SWI) is currently trading at a share price of $58.38. At 1.1 million shares, the company's volume so far today is 1.4 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. Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. The debt ratio is calculated by dividing total liabilities by total assets. SWI has a low debt ratio of 25.4%. 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.

GameStop (NYSE:GME) is up 4.9% to reach a current price of $20.02 per share. The company's volume for the day so far is 2.9 million shares. In technical analysis, trading volume is used to determine the strength of a market indicator. 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. 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 GME is 0.23, which is relatively low. The lower the P/S ratio, the more reasonably price the stock, all else being equal. 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.

F5 Networks (Nasdaq:FFIV) has fallen 3.5% and is currently trading at $94.10 per share. At 760,446 shares, the company's volume so far today is consistent with its average over the last three months. 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. A wide array of ratios can be used by investors to estimate the attractiveness of a potential or existing investment and get an idea of its valuation. Price/earnings ratios (P/E ratios) provide a measure of the relative value of a stock. Compared to the industry average of 25.09, FFIV's P/E ratio of 28.4 is quite high. Generally speaking, the higher the P/E ratio, the higher the market expectations for a company's future performance. 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: Understanding The P/E Ratio

SINA Corporation (Nasdaq:SINA) has moved up 3.3% and is currently trading at $57.95 per share. So far today, 1.5 million shares of the company's stock have changed hands. Volume indicates the level of interest that investors have in a company at its current price. 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/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. SINA's P/B ratio of 3.4 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 value ratios are particularly useful to value investors, distressed or "vulture" investors, or any other investors purchasing beaten-down securities but are less useful to investors focused on growth stocks, purchasing IPOs, or investing in technology or other "asset-lite" companies. SEE: Using The Price-To-Book Ratio To Evaluate Companies

Rising 2.8%, Informatica (Nasdaq:INFA) is currently trading at $33.52 per share. At 902,902 shares, the company's volume so far today is in keeping with its current daily average. 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. Investment valuation ratios can be very useful in estimating whether a stock price is too high, reasonable or a bargain investment opportunity. The debt ratio measures the leverage of a company, and a company's leverage is a good way to assess risk. The debt ratio for INFA is a low 25.5%. 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. 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 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. Keep in mind that all these ratios should be compared against historical numbers and industry information in order to get a more complete picture.

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