So far today, the Nasdaq has risen 0.4%, the S&P 500 has moved little and the Dow has remained steady.
The biggest movers in the Oil and Gas Operations sector (DIG) (+0.5%) are:
|Company||Market Cap||Percentage Change|
|W&T Offshore, Inc. (NYSE:WTI)||$1.22 billion||+15.9%|
|Cobalt International Energy, Inc. (NYSE:CIE)||$9.92 billion||+12.3%|
|Valero Energy (NYSE:VLO)||$14.42 billion||+5.9%|
|Mcmoran Exploration Co (NYSE:MMR)||$2.23 billion||-4.5%|
|Approach Resources Inc. (Nasdaq:AREX)||$901.5 million||+3.2%|
|Swift Energy Company (NYSE:SFY)||$805.9 million||+3.1%|
|Concho Resources Inc. (NYSE:CXO)||$8.91 billion||+2.9%|
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W&T Offshore (NYSE:WTI) has soared 15.9% to reach a current price of $19.07 per share. So far today, the company's volume is 938,124 shares. This is more trading activity than there was yesterday. 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 make use of valuation ratios to estimate whether a stock is fairly valued. The dividend yield is calculated by dividing a company's dividends per share by its stock price. The dividend yield for WTI is 1.9%, which is on the low end. This could indicate that that the stock is overpriced or that future dividends might be higher. A stock's dividend yield depends on the nature of a company's business, its posture in the marketplace (value or growth oriented), its earnings and cash flow, and its dividend policy. SEE: Dividend Yield For The Downturn
Cobalt International Energy (NYSE:CIE) rose a significant 12.3% to reach $27.13 per share. So far today, the company's volume is 4.7 million shares, 3.5 times its current daily average. In technical analysis, trading volume is used to determine the strength of a market indicator. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. The debt ratio shows the proportion of assets that a company is financing through debt. CIE's debt ratio of 11% is on the low side. 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.
Increasing 5.9%, Valero (NYSE:VLO) is trading at $27.62 per share. So far today, the company's volume is 13.1 million shares. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. 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. 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. VLO has a low debt-equity ratio of 48%. 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. The D/E ratio is not a pure measurement of a company's debt because it includes operational liabilities in total liabilities.
Currently trading at $13.19 per share, Mcmoran (NYSE:MMR) has fallen 4.5%. So far today, the company's volume is 1.5 million shares, consistent with its average over the last three months. 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. 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. The capitalizion ratio of 22.8% is on the low end. Investors generally consider a company with low debt and high equity levels is a good quality 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.
Approach Resources (Nasdaq:AREX) has risen 3.2% to hit a current price of $27.77 per share. So far today, 102,166 shares of the company's stock have changed hands. This is on pace to reach yesterday's trading volume of 191,147 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. A company's price/earnings ratio (P/E ratio) provides a measure of how expensive or cheap a stock is. Compared to the industry average of 35.68, AREX's P/E ratio of 106.8 is quite high. Usually, if a stock has a high P/E ratio, it indicates that the market expects the company to grow earnings quickly in the future. 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: The P/E Ratio: A Good Market-Timing Indicator
Swift Energy (NYSE:SFY) is currently trading at $19.39 per share, a 3.1% increase. So far today, the company's volume is 255,319 shares, 0.4 times the current daily average. If a stock price moves on high volume, this means that the change is a significant one. Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. The price/earnings to growth (PEG) ratio is calculated by dividing the price/earnings ratio by growth in earnings-per-share; the lower the PEG ratio, the more reasonably valued the security. PEG ratio for SFY is 0.43. 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.
Increasing 2.9%, Concho Resources (NYSE:CXO) is trading at $88.14 per share. This morning, the company is trading a volume of 847,060 shares. 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 can be very useful in estimating whether a stock price is too high, reasonable or a bargain investment opportunity. If the price/book value ratio of a stock is high, it may indicate that the stock is expensive, while a lower ratio may indicate that the stock is a bargain. CXO's stock is trading for more than its book value with a P/B ratio of 3.03. 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: How Buybacks Warps The Price-To-Book Ratio
The Bottom Line No matter the economic climate, Wall Street will always have stocks that make major moves each week. 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.