On a good day for the market, the Nasdaq is up 1.4%, the S&P 500 has risen 1.1% and the Dow has climbed 0.8%. The energy sector is the category of stocks that relate to producing or supplying energy. This sector includes companies involved in the exploration and development of oil or gas reserves, oil and gas drilling, or integrated power firms. Performance in the sector is largely driven by the supply and demand for worldwide energy. Energy producers will do very well during times of high oil and gas prices, but will earn less when the value of energy drops. Furthermore, this sector is sensitive to political events, which historically have driven changes in the price of oil.
The Energy sector (XLE) is up 0.7%, underperforming the market overall. The biggest movers in the sector are currently:
|Company||Market Cap||Percentage Change|
|TOTAL S.A. (ADR) (NYSE:TOT)||$99.61 billion||+4.6%|
|Alliance Holdings GP, L.P. (Nasdaq:AHGP)||$2.59 billion||+4.5%|
|ENSCO PLC (NYSE:ESV)||$11.89 billion||+4.4%|
|Cameron International (NYSE:CAM)||$12.29 billion||+4%|
|Eni S.p.A. (ADR) (NYSE:E)||$71.55 billion||+4%|
|Suburban Propane Partners, L.P. (NYSE:SPH)||$1.55 billion||-3.7%|
|Alliance Resource Partners, L.P. (Nasdaq:ARLP)||$2.1 billion||+3.4%|
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TOTAL S.A (NYSE:TOT) is currently trading at $46.22 per share, a 4.6% increase. The company's volume for the day so far is 3.6 million shares. In technical analysis, trading volume is used to determine the strength of a market indicator. 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. 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. TOT's P/B ratio of 1.1 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. 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
Alliance Holdings GP (Nasdaq:AHGP) is up 4.5% to reach a current price of $45.14 per share. So far today, the company's volume is 14,850 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. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. The price/earnings ratio is calculated by taking a stock price and dividing it by the earnings-per-share (EPS). Compared to the industry average of 6.16, AHGP's P/E ratio of 12.1 is quite high. Generally speaking, the higher the P/E ratio, the higher the market expectations for a company's future performance. 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 Find P/E And PEG Ratios
ENSCO (NYSE:ESV) has increased to a share price of $53.87, a 4.4% rise. At 5.5 million shares, the company's volume so far today is 1.9 times the average volume over the last three months. 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. Understanding investment valuation ratios allows an investor to assess the true value of an individual stock. The dividend yield is calculated by dividing a company's dividends per share by its stock price. ESV has a dividend yield of 2.9%. 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: Due Diligence On Dividends
Cameron International (NYSE:CAM) has moved up 4% and is currently trading at $51.89 per share. So far this morning, 3.3 million shares have changed hands. This is one times the current daily average. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. Looking at a company's valuation ratios is a good way of getting a basic idea as to its value as an investment. A price/sales ratio is derived by dividing stock market price by company sales. The P/S ratio for CAM is 1.79, which is relatively high. 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.
After an increase of 4%, Eni S.p.A (NYSE:E) has reached a current price of $41.07. At 419,415 shares, the company's volume so far today is on pace to reach yesterday's volume of one million shares. The trading volume for a stock indicates the level of investor interest. Investment valuation ratios can be very useful in estimating whether a stock price is too high, reasonable or a bargain investment opportunity. The debt ratio shows the proportion of assets that a company is financing through debt. E's debt ratio is 60%. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.
Currently trading at $42.00 per share, Suburban Propane Partners (NYSE:SPH) has fallen 3.7%. The company's volume for the day so far is 88,843 shares. If a stock price makes a big move up or down, volume lets us know the significance of that move. Valuation ratios allow the investor to make a quick determination as to a company's investment value. The debt-equity (D/E) ratio is a leverage ratio. The D/E ratio for SPH is 93%. The D/E ratio is not a pure measurement of a company's debt because it includes operational liabilities in total liabilities.
Increasing 3.4%, Alliance Resource Partners (Nasdaq:ARLP) is trading at $58.98 per share. So far today, the company's volume is 32,939 shares, in keeping with the average volume over the past three months. Volume is used to evaluate how meaningful the price movement of a stock is. 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. 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. ARLP's capitalization ratio of 51% is relatively high. The company may have trouble meeting operating and debt liabilities on time and surviving adverse economic conditions. A low level of debt and a healthy proportion of equity in a company's capital structure is an indication of financial fitness.
The Bottom Line On any given day, a particular stock may see positive or negative change in its share price. Daily stock performance should be weighed against historical performance and put in context of the market overall. Tools like valuation ratios and profit margins, however, are only as useful as the context you put them in; remember to take historical data and competitor performance into account.
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