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Tickers in this Article: EZCH, CSC, JIVE, RAX, BLKB, CSGS, NUAN
The market is doing well so far today. The Nasdaq has climbed 0.1%; the S&P 500 has moved up 0.2%; and the Dow is up 0.3%. 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.

Outperforming the market overall, the Technology sector (XLK) is up 0.2% and its biggest movers so far today are:
CompanyMarket CapPercentage Change
EZchip Semiconductor Ltd. (Nasdaq:EZCH)$1.09 billion-25.5%
Computer Sciences (NYSE:CSC)$3.96 billion+17.4%
Jive Software Inc (Nasdaq:JIVE)$1.2 billion-17.2%
Rackspace Hosting, Inc. (NYSE:RAX)$6.66 billion+11.8%
Blackbaud, Inc. (Nasdaq:BLKB)$1.25 billion-11.5%
CSG Systems International, Inc. (Nasdaq:CSGS)$604.8 million+10.6%
Nuance Communications Inc. (Nasdaq:NUAN)$6.63 billion+9.7%
Forex Broker Summary: UFXMarkets

After a precipitous drop of 25.5%, EZchip (Nasdaq:EZCH) is now trading at a share price of $29.12. So far today, the company's volume is 2.4 million shares, 7.8 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 ratio is calculated by taking a stock price and dividing it by the earnings-per-share (EPS). The P/E ratio for EZCH is 97.7, above the industry average of 27.82. 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 P/E ratio indicates a stock that is expensive, while a low P/E ratio indicates a stock that is cheap. SEE: How To Use The P/E Ratio And PEG To Tell The Future Of A Stock

After a big jump of 17.4%, Computer (NYSE:CSC) is trading at $29.97 per share. The company's volume for the day so far is 2.6 million shares. When a stock price moves up or down, watching the volume is a good way of identifying how significant that shift is. A company's investment value can be 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. 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. CSC has a debt ratio of 75.2%, which is on the high side. This means that the company's cash flow is significantly impacted by paying off principal and interest and that any negative change in performance or rise in interest rates could result in default. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.

Jive Software (Nasdaq:JIVE) is currently trading at $16.09 per share, after a steep drop of 17.2%. The company's volume is currently 1.6 million shares for the day, 4.3 times its current three-month average. 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. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. 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. JIVE has a fairly low capitalization ratio of 6.1%. A low capitalization ratio can signify a failure to leverage equity into investment, missing valuable opportunities for growth and expansion. Prudent use of leverage (debt) increases the financial resources available to a company for growth and expansion.

Rackspace Hosting (NYSE:RAX) is currently at $55.14 per share after a dramatic increase of 11.8%. The company's volume for the day so far is four million shares. In technical analysis, trading volume is used to determine the strength of a market indicator. 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 debt-equity ratio of 22% is relatively low. 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 is not a pure measurement of a company's debt because it includes operational liabilities in total liabilities.

Shares of Blackbaud (Nasdaq:BLKB) are currently trading at $24.58, a steep decline of 11.5%. The company's volume is currently 545,563 shares for the day, 2.4 times its current daily average. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. 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. PEG ratio for BLKB is 2.94. 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.

CSG Systems International (Nasdaq:CSGS) rose a significant 10.6% to reach $19.69 per share. So far today, the company's volume is 408,968 shares. Volume indicates the level of interest that investors have in a company at its current price. Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. The price/book value ratio provides a way of evaluating whether a stock is relatively cheap or expensive. The P/B ratio for CSGS is 2.35, indicating that the stock is trading for more 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: Using The Price-To-Book Ratio To Evaluate Companies

Nuance Communications (Nasdaq:NUAN) has moved up 9.7% and is currently trading at $23.72 per share. The company's volume for the day so far is 4.1 million shares, one 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. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. Price/earnings ratios (P/E ratios) provide a measure of the relative value of a stock. NUAN's P/E ratio of 154.5 is above the industry average of 68.92. 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. High P/E stocks could be "growth" stocks, while low PE stocks may be "value" stocks. SEE: Understanding The P/E Ratio

The Bottom Line The nature of the market is such that stocks will have good days and bad days. 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.

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