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Today's Major Utilities Sector Movers: CMLP and More
The market has been slipping so far today. The Nasdaq has fallen 0.2%; the S&P 500 has slipped 0.5%; and the Dow has declined 0.6%. The utilities sector is a category of stocks for utilities such as gas and power. It contains companies such as electric, gas and water firms and integrated providers. Because utilities require significant infrastructure, these firms often carry large amounts of debt. With a high debt load, utilities companies become sensitive to changes in the interest rate. As interest rates rise or drop, the debt payments will increase or decrease. The utilities sector performs best when interest rates are falling or remain low.
The Utilities sector (XLU) is currently lagging behind the overall market, down 0.6%, and its current biggest movers are:
Broker Summary: E-Trade Financial
After a decline of 6.9%, Crestwood Midstream (NYSE:CMLP) has hit a share price of $26.84. So far today, 60,517 shares of the company's stock have changed hands. This is greater than yesterday's volume of 42,082 shares. When a stock price moves up or down, watching the volume is a good way of identifying how significant that shift is. 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 capitalization ratio is calculated by dividing long-term debt by the sum of long-term debt and shareholders' equity. CMLP has a capitalization ratio of 50.2%, which is on the high end. A high capitalization ratio is not necessarily bad since higher financial leverage can increase the return on a shareholder's investment. Prudent use of leverage (debt) increases the financial resources available to a company for growth and expansion.
NRG (NYSE:NRG) has decreased to $18.88 per share, a 3.3% fall. At 5.3 million shares, the company's volume so far today is 1.2 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. Looking at a company's valuation ratios is a good way of getting a basic idea as to its value as an investment. 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. NRG has a PEG ratio of 1.87. Because of the adjustment for earnings growth rate, the PEG ratio is somewhat more useful than many formulas for comparing companies in different industries.
Currently trading at $43.22 per share, Oneok (NYSE:OKE) has fallen 1.7%. The company is currently trading a volume of 205,999 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. OKE has a P/B ratio of 3.98 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. A weakness of the P/B value ratio is that while the price component is easily determined by looking at the stock quote, the book value component is more difficult to estimate and more open to individual interpretation and analysis. SEE: Using The Price-To-Book Ratio To Evaluate Companies
Korea Electric Power Corporation (NYSE:KEP) has risen 1.4% and is currently trading at $11.04 per share. So far today, the company's volume is 390,969 shares, one times the average volume over the last three months. Volume is used to evaluate how meaningful the price movement of a stock is. Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. In a nutshell, the price/sales ratio shows how much Wall Street values every dollar of the company's sales. KEP's P/S ratio of 0.37 is fairly low. Coupled with high relative strength in the previous twelve months, a low P/S ratio is one of the most potent combinations of investment criteria. All things being equal, a low P/S ratio is good news for investors, while a very high one can be a warning sign.
South Jersey Industries (NYSE:SJI) is down 1.3% to reach $51.69 per share. The company's volume is currently 26,912 shares. This is a sign that there will be less trading activity than there was yesterday. In technical analysis, trading volume is used to determine the strength of a market indicator. 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 easy-to-calculate debt ratio is helpful to investors looking for a quick take on the leverage for a company. The debt ratio for SJI is 70.5%, which is relatively high. As such, the company is highly leveraged and not highly liquid. 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.
Alliant (NYSE:LNT) has fallen 1.3% and is currently trading at $46.35 per share. At 137,198 shares, the company's volume so far today is 0.4 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. 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. The D/E ratio for LNT is 87%. The D/E ratio percentage provides a much more dramatic perspective on a company's leverage position than the debt ratio percentage.
DTE Energy (NYSE:DTE) is trading at $59.44 per share, down 1.2%. So far today, 311,663 shares have changed hands. High volume indicates a lot of investor interest while low volume indicates the opposite. Valuation ratios allow the investor to make a quick determination as to a company's investment value. Price/earnings ratios (P/E ratios) provide a measure of the relative value of a stock. The P/E ratio for DTE is 15.1, above the industry average of 12.91. 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. From the investor's perspective, a stock with a lower ratio is relatively cheaper than a stock with a higher ratio. SEE: Investment Valuation Ratios: Price/Earnings Ratio
The Bottom Line No matter the economic climate, Wall Street will always have stocks that make major moves each week. It is important to weigh current activity against historical performance when making any investment decisions. Keep in mind that all these ratios should be compared against historical numbers and industry information in order to get a more complete picture.
The Utilities sector (XLU) is currently lagging behind the overall market, down 0.6%, and its current biggest movers are:
| Company | Market Cap | Percentage Change |
| Crestwood Midstream Partners LP (NYSE:CMLP) | $1.25 billion | -6.9% |
| NRG Energy (NYSE:NRG) | $4.45 billion | -3.3% |
| Oneok (NYSE:OKE) | $9.14 billion | -1.7% |
| Korea Electric Power Corporation (ADR) (NYSE:KEP) | $13.97 billion | +1.4% |
| South Jersey Industries Inc (NYSE:SJI) | $1.59 billion | -1.3% |
| Alliant Energy Corporation (NYSE:LNT) | $5.21 billion | -1.3% |
| DTE Energy (NYSE:DTE) | $10.24 billion | -1.2% |
After a decline of 6.9%, Crestwood Midstream (NYSE:CMLP) has hit a share price of $26.84. So far today, 60,517 shares of the company's stock have changed hands. This is greater than yesterday's volume of 42,082 shares. When a stock price moves up or down, watching the volume is a good way of identifying how significant that shift is. 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 capitalization ratio is calculated by dividing long-term debt by the sum of long-term debt and shareholders' equity. CMLP has a capitalization ratio of 50.2%, which is on the high end. A high capitalization ratio is not necessarily bad since higher financial leverage can increase the return on a shareholder's investment. Prudent use of leverage (debt) increases the financial resources available to a company for growth and expansion.
NRG (NYSE:NRG) has decreased to $18.88 per share, a 3.3% fall. At 5.3 million shares, the company's volume so far today is 1.2 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. Looking at a company's valuation ratios is a good way of getting a basic idea as to its value as an investment. 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. NRG has a PEG ratio of 1.87. Because of the adjustment for earnings growth rate, the PEG ratio is somewhat more useful than many formulas for comparing companies in different industries.
Currently trading at $43.22 per share, Oneok (NYSE:OKE) has fallen 1.7%. The company is currently trading a volume of 205,999 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. OKE has a P/B ratio of 3.98 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. A weakness of the P/B value ratio is that while the price component is easily determined by looking at the stock quote, the book value component is more difficult to estimate and more open to individual interpretation and analysis. SEE: Using The Price-To-Book Ratio To Evaluate Companies
South Jersey Industries (NYSE:SJI) is down 1.3% to reach $51.69 per share. The company's volume is currently 26,912 shares. This is a sign that there will be less trading activity than there was yesterday. In technical analysis, trading volume is used to determine the strength of a market indicator. 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 easy-to-calculate debt ratio is helpful to investors looking for a quick take on the leverage for a company. The debt ratio for SJI is 70.5%, which is relatively high. As such, the company is highly leveraged and not highly liquid. 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.
Alliant (NYSE:LNT) has fallen 1.3% and is currently trading at $46.35 per share. At 137,198 shares, the company's volume so far today is 0.4 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. 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. The D/E ratio for LNT is 87%. The D/E ratio percentage provides a much more dramatic perspective on a company's leverage position than the debt ratio percentage.
DTE Energy (NYSE:DTE) is trading at $59.44 per share, down 1.2%. So far today, 311,663 shares have changed hands. High volume indicates a lot of investor interest while low volume indicates the opposite. Valuation ratios allow the investor to make a quick determination as to a company's investment value. Price/earnings ratios (P/E ratios) provide a measure of the relative value of a stock. The P/E ratio for DTE is 15.1, above the industry average of 12.91. 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. From the investor's perspective, a stock with a lower ratio is relatively cheaper than a stock with a higher ratio. SEE: Investment Valuation Ratios: Price/Earnings Ratio
The Bottom Line No matter the economic climate, Wall Street will always have stocks that make major moves each week. It is important to weigh current activity against historical performance when making any investment decisions. Keep in mind that all these ratios should be compared against historical numbers and industry information in order to get a more complete picture.
by
Investopedia Staff
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