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Tickers in this Article: RLJ, DFT, AEC, CHSP, PPS, SLG, NNN
On a good day for the market, the Nasdaq has climbed 1.2%, the S&P 500 has moved up 0.6% and the Dow is up 0.7%.

The Real Estate Operations sector (IYR) is down 0.8% on a good day for the market overall. The biggest movers in the sector so far are:
CompanyMarket CapPercentage Change
Digital Realty Trust, Inc. (NYSE:DLR)$9.77 billion-5%
PICO Holdings Inc (Nasdaq:PICO)$526.2 million+3%
DuPont Fabros Technology, Inc. (NYSE:DFT)$1.77 billion-2.9%
American Capital Agency Corp. (Nasdaq:AGNC)$10.59 billion-2.8%
Zillow Inc (Nasdaq:Z)$1.19 billion+1.9%
Select Income REIT (NYSE:SIR)$812.1 million+1.8%
BRE Properties, Inc. (NYSE:BRE)$4.08 billion-1.3%
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Currently trading at $76.33 per share, Digital Realty Trust (NYSE:DLR) has fallen 5%. So far today, the company's volume is 1.2 million shares, 1.2 times the average daily volume. A stock's volume conveys how excited investors are about it. Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. The price/sales ratio measures a company's stock market value by its total revenues or alternatively, a company's price per share by its revenue per share. DLR's P/S ratio of 7.21 is on the high side. In young companies, a high P/S ratio is a sign of sales growth that is expected to turn into earnings and cash flow. All things being equal, a low P/S ratio is good news for investors, while a very high one can be a warning sign.

PICO Holdings (Nasdaq:PICO) has moved up 3% and is currently trading at $23.80 per share. The company is currently trading a volume of 49,785 shares. Volume is used to evaluate how meaningful the price movement of a stock is. Margin analysis is a great way to understand the profitability of companies. The company's net profit margin is negative. A negative net profit margin means the company spent more money than it made.

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 is calculated by dividing total liabilities by total assets. PICO has a debt ratio of 28.6%, which is fairly low. This indicates that the company engages in conservative financing with opportunities to borrow in the future at no significant risk. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.

Falling 2.9%, DuPont Fabros Technology (NYSE:DFT) is currently at a share price of $27.15. This morning, 352,831 shares have been traded, which is less activity than yesterday's volume of one million shares. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. Margin ratios highlight companies that are worth further examination. DFT has a gross profit margin of 69%. Investors in growth stocks or short-term traders may be less interested in the operating margin ratio. DFT has an operating profit margin of 33.3%. While ratios such as price/earnings (P/E) or price/book value look at the relative attractiveness of a stock, the net profit margin ratio focuses on company performance rather that stock market valuation. Net profit margin for the company is 21.1%.

Investment valuation ratios can be very useful in estimating whether a stock price is too high, reasonable or a bargain investment opportunity. 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 DFT is 76%. The D/E ratio percentage provides a much more dramatic perspective on a company's leverage position than the debt ratio percentage.

American Capital (Nasdaq:AGNC) is down 2.8% to reach $34.30 per share. So far today, 31.4 million shares have changed hands. This is 5.3 times the current three-month average. 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. A simple P/E ratio can reveal the stock's real market value and show how the valuation compares to its industry group or a benchmark like the S&P 500 Index. The P/E ratio for AGNC is 5.6, below the industry average of 8.28. 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 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

Zillow (Nasdaq:Z) is up 1.9% to reach a current price of $42.15 per share. So far today, the company's volume is 311,995 shares, 0.8 times the average daily volume. If a stock price makes a big move up or down, volume lets us know the significance of that move. Profit-margin ratios can give investors deeper insight into management efficiency than earnings alone can provide. Gross profit margin, operating profit margin and net margin are commonly used margins. Z has a high gross profit margin of 94.9%. A high gross profit margin generally means that the company can make a reasonable profit on sales, provided that overhead costs do not increase. Operating margin for Z is 7.4% and net margin is 4.7%, both high relative to its gross margin.

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. Z's stock is trading for more than its book value with a P/B ratio of 11.3. 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. Users need to be careful when applying this ratio though, as it is more useful for industrial companies that have a lot of tangible assets than it is for technology or consumer product companies that may not have much in the way of hard assets. SEE: How Buybacks Warps The Price-To-Book Ratio

Select Income (NYSE:SIR) is at $26.50 per share after an increase of 1.8%. The company's volume for the day so far is 74,994 shares. Volume is an important indicator because it indicates how significant a price shift is. Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. Dividend yield measures the income that a stock will generate for an investor. SIR has a dividend yield of 6.1%. Just as with the yield on a bond or certificate of deposit, the higher the dividend yield, the higher the return to the investor. SEE: Dividend Yield For The Downturn

At $52.55, BRE Properties (NYSE:BRE) has slipped 1.3%. So far today, 97,282 shares have changed hands, below yesterday's volume of 264,955 shares. Volume indicates the level of interest that investors have in a company at its current price. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. 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 BRE is 10.07, which is relatively high. This could be a good sign if the share price increases. 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.

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.

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