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Today's Major Energy Sector Movers: IOC and More
The market has been doing well after the morning's trading. The Nasdaq has climbed 1.1%; the S&P 500 has moved up 1.3%; and the Dow has risen 1.4%. The energy sector is the category of stocks that relate to producing or supplying energy. This sector includes companies involved in the exploration and development of oil or gas reserves, oil and gas drilling, or integrated power firms. Performance in the sector is largely driven by the supply and demand for worldwide energy. Energy producers will do very well during times of high oil and gas prices, but will earn less when the value of energy drops. Furthermore, this sector is sensitive to political events, which historically have driven changes in the price of oil.
Outperforming the market overall, the Energy sector (XLE) is up 1.8% and its biggest movers so far today are:
Broker Summary: E-Trade Financial
After an increase of 9.9%, InterOil Corporation (NYSE:IOC) has reached a current price of $82.89. The company's volume is currently 795,294 shares for the day, 1.5 times the average daily volume. 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. 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 is calculated by dividing total liabilities by total assets. IOC's debt ratio of 27.4% 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 9%, Halcon (NYSE:HK) is currently trading at $6.54 per share. The company's volume for the day so far is 1.2 million shares. Volume is an important indicator because it indicates how significant a price shift is. Investment valuation ratios can be very useful in estimating whether a stock price is too high, reasonable or a bargain investment opportunity. The capitalization ratio is calculated by dividing long-term debt by the sum of long-term debt and shareholders' equity. The capitalizion ratio of 25.9% is on the low end. Investors generally consider a company with low debt and high equity levels is a good quality investment. Prudent use of leverage (debt) increases the financial resources available to a company for growth and expansion.
National Oilwell (NYSE:NOV) is currently trading at $72.43 per share, a 7.6% increase. The company's volume for the day so far is 3.4 million shares, one times the current three-month average. A stock's volume conveys how excited investors are about it. 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 debt-equity (D/E) ratio is a measurement of how much suppliers, lenders, creditors and obligors have committed to the company versus what the shareholders have committed. The debt-equity ratio of 3% is relatively low. This shows that the company's assets are financed primarily through equity. The D/E ratio percentage provides a much more dramatic perspective on a company's leverage position than the debt ratio percentage.
After rising 6.8%, Cameron International (NYSE:CAM) is currently trading at a share price of $47.90. The company is currently trading a volume of 2.3 million shares. A stock's volume conveys how excited investors are about it. 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. Price/earnings ratios (P/E ratios) provide a measure of the relative value of a stock. CAM has a P/E ratio of 20.4, high compared to the industry average of 13.15. A company with a high P/E ratio will eventually have to live up to the high rating by substantially increasing its earnings, or the price will need to drop. A high or low P/E ratio is not good or bad in and of itself, but a company trading with a high P/E ratio must continue to post strong financial performance or its stock price is likely to fall. SEE: Investment Valuation Ratios: Price/Earnings Ratio
Eni S.p.A (NYSE:E) has moved up 6.7% and is currently trading at $39.65 per share. The company's volume is currently 580,193 shares for the day, one times the average daily volume. High volume indicates a lot of investor interest while low volume indicates the opposite. 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 price/earnings to growth (PEG) ratio divides a company's P/E ratio by its growth rate of earnings-per-share. E has a PEG ratio of 2.07, which is consistent with the industry average. 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.
Currently trading at $65.05 per share, Continental Resources (NYSE:CLR) has fallen 5.9%. So far today, the company's volume is 1.7 million shares. This is greater than yesterday's volume of 1.1 million shares. 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. 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. The price/book value ratio is calculated by dividing the current stock price by the company's book value per share. CLR has a P/B ratio of 4.95 which shows that its share price is higher than its book value. It is important to take the company's debt into account when using the P/B ratio as debt can boost a company's liabilities to the point where they wipe out much of the book value of its hard assets, creating artificially high P/B values. 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
Increasing 5.7%, Energen (NYSE:EGN) is trading at $49.06 per share. With 397,909 shares changing hands so far today, the company's volume is in keeping with the average volume over the past three months. 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. 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 dividend yield is measured by taking the annual dividends per share and dividing that number by the stock price. EGN has a dividend yield of 1.2%, which is fairly low. This may indicate that the company's stock is overpriced. It is important to remember that dividends are only one component of a stock's return and capital appreciation (or decline) must also be considered when evaluating a security. SEE: Due Diligence On Dividends
The Bottom Line No matter the economic climate, Wall Street will always have stocks that make major moves each week. Daily stock performance should be weighed against historical performance and put in context of the market overall. However, these fundamental metrics must be analyzed with historic data, industry information in addition to firm specific financial statements.
Outperforming the market overall, the Energy sector (XLE) is up 1.8% and its biggest movers so far today are:
| Company | Market Cap | Percentage Change |
| InterOil Corporation (USA) (NYSE:IOC) | $3.63 billion | +9.9% |
| Halcon Resources Corp (NYSE:HK) | $1.04 billion | -9% |
| National Oilwell Varco (NYSE:NOV) | $28.7 billion | +7.6% |
| Cameron International (NYSE:CAM) | $11.04 billion | +6.8% |
| Eni S.p.A. (ADR) (NYSE:E) | $67.31 billion | +6.7% |
| Continental Resources, Inc. (NYSE:CLR) | $12.53 billion | -5.9% |
| Energen Corporation (NYSE:EGN) | $3.35 billion | +5.7% |
After an increase of 9.9%, InterOil Corporation (NYSE:IOC) has reached a current price of $82.89. The company's volume is currently 795,294 shares for the day, 1.5 times the average daily volume. 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. 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 is calculated by dividing total liabilities by total assets. IOC's debt ratio of 27.4% 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 9%, Halcon (NYSE:HK) is currently trading at $6.54 per share. The company's volume for the day so far is 1.2 million shares. Volume is an important indicator because it indicates how significant a price shift is. Investment valuation ratios can be very useful in estimating whether a stock price is too high, reasonable or a bargain investment opportunity. The capitalization ratio is calculated by dividing long-term debt by the sum of long-term debt and shareholders' equity. The capitalizion ratio of 25.9% is on the low end. Investors generally consider a company with low debt and high equity levels is a good quality investment. Prudent use of leverage (debt) increases the financial resources available to a company for growth and expansion.
National Oilwell (NYSE:NOV) is currently trading at $72.43 per share, a 7.6% increase. The company's volume for the day so far is 3.4 million shares, one times the current three-month average. A stock's volume conveys how excited investors are about it. 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 debt-equity (D/E) ratio is a measurement of how much suppliers, lenders, creditors and obligors have committed to the company versus what the shareholders have committed. The debt-equity ratio of 3% is relatively low. This shows that the company's assets are financed primarily through equity. The D/E ratio percentage provides a much more dramatic perspective on a company's leverage position than the debt ratio percentage.
After rising 6.8%, Cameron International (NYSE:CAM) is currently trading at a share price of $47.90. The company is currently trading a volume of 2.3 million shares. A stock's volume conveys how excited investors are about it. 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. Price/earnings ratios (P/E ratios) provide a measure of the relative value of a stock. CAM has a P/E ratio of 20.4, high compared to the industry average of 13.15. A company with a high P/E ratio will eventually have to live up to the high rating by substantially increasing its earnings, or the price will need to drop. A high or low P/E ratio is not good or bad in and of itself, but a company trading with a high P/E ratio must continue to post strong financial performance or its stock price is likely to fall. SEE: Investment Valuation Ratios: Price/Earnings Ratio
Eni S.p.A (NYSE:E) has moved up 6.7% and is currently trading at $39.65 per share. The company's volume is currently 580,193 shares for the day, one times the average daily volume. High volume indicates a lot of investor interest while low volume indicates the opposite. 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 price/earnings to growth (PEG) ratio divides a company's P/E ratio by its growth rate of earnings-per-share. E has a PEG ratio of 2.07, which is consistent with the industry average. 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.
Currently trading at $65.05 per share, Continental Resources (NYSE:CLR) has fallen 5.9%. So far today, the company's volume is 1.7 million shares. This is greater than yesterday's volume of 1.1 million shares. 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. 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. The price/book value ratio is calculated by dividing the current stock price by the company's book value per share. CLR has a P/B ratio of 4.95 which shows that its share price is higher than its book value. It is important to take the company's debt into account when using the P/B ratio as debt can boost a company's liabilities to the point where they wipe out much of the book value of its hard assets, creating artificially high P/B values. 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
Increasing 5.7%, Energen (NYSE:EGN) is trading at $49.06 per share. With 397,909 shares changing hands so far today, the company's volume is in keeping with the average volume over the past three months. 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. 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 dividend yield is measured by taking the annual dividends per share and dividing that number by the stock price. EGN has a dividend yield of 1.2%, which is fairly low. This may indicate that the company's stock is overpriced. It is important to remember that dividends are only one component of a stock's return and capital appreciation (or decline) must also be considered when evaluating a security. SEE: Due Diligence On Dividends
The Bottom Line No matter the economic climate, Wall Street will always have stocks that make major moves each week. Daily stock performance should be weighed against historical performance and put in context of the market overall. However, these fundamental metrics must be analyzed with historic data, industry information in addition to firm specific financial statements.
by
Investopedia Staff
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