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Technology Stocks, Including Open Text Corporation (USA), Making Big Moves Today
The market is having a bad day so far: the Nasdaq has declined 0.2%; the S&P 500 is trading down 0.2%; and the Dow has fallen 0.2%. 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 0.1%, outperforming the market overall. Currently, the biggest movers in the sector are:
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After a big jump of 21.3%, Bottomline (Nasdaq:EPAY) is trading at $24.20 per share. The company's volume for the day so far is 360,117 shares, 2.5 times its average over the past three months. As a stock moves up or down, it is important to pay attention to the trading volume. This indicates the level of interest: the higher the volume, the more the interest. Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. The price/earnings to growth (PEG) ratio divides a company's P/E ratio by its growth rate of earnings-per-share. EPAY's PEG ratio is 1.13. 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.
Imperva (NYSE:IMPV) is trading at $31.31 per share, a significant rise of 19.7%. The company's volume for the day so far is 603,033 shares. This is greater than yesterday's volume of 256,497 shares. If a stock price moves on high volume, this means that the change is a significant one. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. The price/book value ratio is especially important for value investors as it can provide an indication of the true value of a company's assets at a time when its business model may be failing. IMPV's P/B ratio of 9.18 shows that its share price is higher 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
Cornerstone OnDemand (Nasdaq:CSOD) rose a significant 11.4% to reach $28.18 per share. So far today, the company's volume is 639,293 shares, 2.8 times the average daily volume. 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 is used for spotting recovery situations or for double-checking that a company's growth has not become overvalued. CSOD has a high P/S ratio of 13.32. 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.
Shares of Spreadtrum Communications, Inc (Nasdaq:SPRD) are currently trading at $17.16, a steep decline of 11.4%. So far today, 2.1 million shares have changed hands. In technical analysis, trading volume is used to determine the strength of a market indicator. 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 easy-to-calculate debt ratio is helpful to investors looking for a quick take on the leverage for a company. SPRD's debt ratio is 51.5%. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.
After a big jump of 10.3%, Open Text Corporation (Nasdaq:OTEX) is trading at $54.47 per share. So far today, the company's volume is 895,928 shares, 2.2 times the current three-month average. A stock's volume conveys how excited investors are about it. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. There are generally two price/earnings ratios calculated: the first, called the trailing Price/Earnings ratio, is calculated using the previous years actual earnings; the second, called forward Price/Earnings ratio, is calculated using the next year's estimated earnings. Relative to the industry P/E ratio of 68.92, OTEX's 19.8 is low. Companies with low P/E ratios may find it easier to surprise the market to the upside, even if their financial performance is not as strong as that of companies with high P/E ratios. A high P/E ratio indicates a stock that is expensive, while a low P/E ratio indicates a stock that is cheap. SEE: Understanding The P/E Ratio
SS and C Technologies Holdings (Nasdaq:SSNC) has fallen 9.1% and is currently trading at $23 per share. The company's volume is currently 583,319 shares. Yesterday's volume was only 263,869 shares. Volume is an important indicator because it indicates how significant a price shift is. Valuation ratios allow the investor to make a quick determination as to a company's investment value. The debt-equity (D/E) ratio is a leverage ratio. SSNC has a low debt-equity ratio of 8%. 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.
Cogent Communications Group (Nasdaq:CCOI) is at $18.95 per share after an increase of 4.5%. At 104,889 shares, the company's volume so far today is in keeping with 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. Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. The capitalization ratio measures the debt component of the capital structure, or capitalization of a company (i.e., the sum of long-term debt liabilities and shareholder equity) to support operations and growth. CCOI has a high capitalization ratio of 60.5%. A high capitalization ratio is not necessarily bad since higher financial leverage can increase the return on a shareholder's investment. This ratio is considered to be one of the more meaningful of the "debt" ratios - it delivers the key insight into the use of leverage by a company.
The Bottom Line On any given day, a particular stock may see positive or negative change in its share price. 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.
The Technology sector (XLK) is down 0.1%, outperforming the market overall. Currently, the biggest movers in the sector are:
| Company | Market Cap | Percentage Change |
| Bottomline Technologies (Nasdaq:EPAY) | $733.1 million | +21.3% |
| Imperva Inc (NYSE:IMPV) | $591.3 million | +19.7% |
| Cornerstone OnDemand, Inc. (Nasdaq:CSOD) | $1.26 billion | +11.4% |
| Spreadtrum Communications, Inc (ADR) (Nasdaq:SPRD) | $909.8 million | -11.4% |
| Open Text Corporation (USA) (Nasdaq:OTEX) | $2.88 billion | +10.3% |
| SS and C Technologies Holdings Inc (Nasdaq:SSNC) | $1.98 billion | -9.1% |
| Cogent Communications Group, Inc. (Nasdaq:CCOI) | $849.4 million | +4.5% |
After a big jump of 21.3%, Bottomline (Nasdaq:EPAY) is trading at $24.20 per share. The company's volume for the day so far is 360,117 shares, 2.5 times its average over the past three months. As a stock moves up or down, it is important to pay attention to the trading volume. This indicates the level of interest: the higher the volume, the more the interest. Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. The price/earnings to growth (PEG) ratio divides a company's P/E ratio by its growth rate of earnings-per-share. EPAY's PEG ratio is 1.13. 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.
Imperva (NYSE:IMPV) is trading at $31.31 per share, a significant rise of 19.7%. The company's volume for the day so far is 603,033 shares. This is greater than yesterday's volume of 256,497 shares. If a stock price moves on high volume, this means that the change is a significant one. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. The price/book value ratio is especially important for value investors as it can provide an indication of the true value of a company's assets at a time when its business model may be failing. IMPV's P/B ratio of 9.18 shows that its share price is higher 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
Cornerstone OnDemand (Nasdaq:CSOD) rose a significant 11.4% to reach $28.18 per share. So far today, the company's volume is 639,293 shares, 2.8 times the average daily volume. 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 is used for spotting recovery situations or for double-checking that a company's growth has not become overvalued. CSOD has a high P/S ratio of 13.32. 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.
After a big jump of 10.3%, Open Text Corporation (Nasdaq:OTEX) is trading at $54.47 per share. So far today, the company's volume is 895,928 shares, 2.2 times the current three-month average. A stock's volume conveys how excited investors are about it. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. There are generally two price/earnings ratios calculated: the first, called the trailing Price/Earnings ratio, is calculated using the previous years actual earnings; the second, called forward Price/Earnings ratio, is calculated using the next year's estimated earnings. Relative to the industry P/E ratio of 68.92, OTEX's 19.8 is low. Companies with low P/E ratios may find it easier to surprise the market to the upside, even if their financial performance is not as strong as that of companies with high P/E ratios. A high P/E ratio indicates a stock that is expensive, while a low P/E ratio indicates a stock that is cheap. SEE: Understanding The P/E Ratio
SS and C Technologies Holdings (Nasdaq:SSNC) has fallen 9.1% and is currently trading at $23 per share. The company's volume is currently 583,319 shares. Yesterday's volume was only 263,869 shares. Volume is an important indicator because it indicates how significant a price shift is. Valuation ratios allow the investor to make a quick determination as to a company's investment value. The debt-equity (D/E) ratio is a leverage ratio. SSNC has a low debt-equity ratio of 8%. 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.
Cogent Communications Group (Nasdaq:CCOI) is at $18.95 per share after an increase of 4.5%. At 104,889 shares, the company's volume so far today is in keeping with 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. Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. The capitalization ratio measures the debt component of the capital structure, or capitalization of a company (i.e., the sum of long-term debt liabilities and shareholder equity) to support operations and growth. CCOI has a high capitalization ratio of 60.5%. A high capitalization ratio is not necessarily bad since higher financial leverage can increase the return on a shareholder's investment. This ratio is considered to be one of the more meaningful of the "debt" ratios - it delivers the key insight into the use of leverage by a company.
The Bottom Line On any given day, a particular stock may see positive or negative change in its share price. 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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