The Nasdaq has slipped 0.4%, the S&P 500 has fallen 0.8% and the Dow has declined 0.8% on a bad morning for the market.
The Oil and Gas Operations sector (DIG) is down 3.1%, underperforming the market overall. The current biggest movers in the sector are:
|Company||Market Cap||Percentage Change|
|World Fuel Services Corporation (NYSE:INT)||$2.93 billion||-15.6%|
|Bill Barrett Corporation (NYSE:BBG)||$1.02 billion||-13%|
|Stone Energy Corporation (NYSE:SGY)||$1.3 billion||-11.4%|
|Tesoro (NYSE:TSO)||$3.9 billion||+11.3%|
|SM Energy Co. (NYSE:SM)||$3.03 billion||-11.2%|
|Halcon Resources Corp (NYSE:HK)||$901.6 million||+7.8%|
|Apache (NYSE:APA)||$33.95 billion||-5.2%|
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World Fuel (NYSE:INT) is currently trading at $34.40 per share, after a steep drop of 15.6%. So far today, the company's volume is 1.1 million shares. Yesterday's volume was only 403,767 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. 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 easy-to-calculate debt ratio is helpful to investors looking for a quick take on the leverage for a company. INT has a high debt ratio of 64.8%. This means that most of the company's assets are financed through debt. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.
Shares of Bill (NYSE:BBG) are currently trading at $18.36, a steep decline of 13%. With 1.6 million shares changing hands so far today, the company's volume is 1.3 times its current three-month average. If a stock price moves on high volume, this means that the change is a significant one. 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 D/E ratio for BBG is 86%. The D/E ratio is not a pure measurement of a company's debt because it includes operational liabilities in total liabilities.
Stone (NYSE:SGY) is at a share price of $23.34 after a sharp decline of 11.4%. So far today, 1.3 million shares have changed hands. 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. A company's capitalization (not to be confused with its market capitalization) is the term used to describe the makeup of a company's permanent or long-term capital, which consists of both long-term debt and shareholders' equity. The capitalization ratio for SGY is 52.3%, which is fairly high. If the company is a company is in a highly competitive business and hobbled by high debt, it will find its competitors taking advantage of its problems to grab more market share. A low level of debt and a healthy proportion of equity in a company's capital structure is an indication of financial fitness.
After a big jump of 11.3%, Tesoro (NYSE:TSO) is trading at $30.95 per share. So far today, the company's volume is 7.5 million shares, two times the current daily average. Volume is used to evaluate how meaningful the price movement of a stock is. Investment valuation ratios can be very useful in estimating whether a stock price is too high, reasonable or a bargain investment opportunity. 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. TSO has a P/B ratio of 1.16 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 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: How Buybacks Warps The Price-To-Book Ratio
Taking a 11.2% hit, SM (NYSE:SM) is currently trading at $42 per share. The company is trading at a volume of 3.1 million shares. This is more trading activity than there was yesterday. 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. Understanding investment valuation ratios allows an investor to assess the true value of an individual stock. Price/earnings ratios (P/E ratios) provide a measure of the relative value of a stock. SM's P/E ratio of 12.3 falls below the industry average of 35.68. 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. 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: Can Investors Trust the P/E Ratio?
Halcon (NYSE:HK) has risen 7.8% to hit a current price of $6.75 per share. So far today, the company's volume is 1.5 million shares, 0.7 times its average over the past three months. High volume indicates a lot of investor interest while low volume indicates the opposite. 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. A price/sales ratio is derived by dividing stock market price by company sales. The P/S ratio for HK is a high 10.08. This could be a good sign if the share price increases. All things being equal, a low P/S ratio is good news for investors, while a very high one can be a warning sign.
Slipping 5.2%, Apache (NYSE:APA) is currently trading at $82.37 per share. The company is currently trading a volume of 2.1 million 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. Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. The debt ratio gives users a quick measure of the amount of debt that the company has on its balance sheets compared to its assets. APA has a low debt ratio of 44.2%. 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 On any given day, a particular stock may see positive or negative change in its share price. Paying close attention to the previous ratios will help you identify key times to adjust your strategy. Keep in mind that all these ratios should be compared against historical numbers and industry information in order to get a more complete picture.