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Utilities Sector's Biggest Movers: Edison International and More
The morning has been good for the market. The Nasdaq is up 0.1%; the S&P 500 has increased 0.5%; and the Dow is trading up 0.4%. 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.
Outperforming the market overall, the Utilities sector (XLU) is up 0.3% and its biggest movers so far today are:
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PAA Natural Gas Storage (NYSE:PNG) is currently trading at a share price of $18.05, a 2.8% decline. So far today, the company's volume is 84,732 shares. At this rate, trading activity will likely be down from yesterday when 227,481 shares changed hands. If a stock price makes a big move up or down, volume lets us know the significance of that move. Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. The price/book value ratio, often expressed simply as "price-to-book", provides investors a way to compare the market value, or what they are paying for each share, to a conservative measure of the value of the firm. PNG's P/B ratio of 1.21 shows that its share price is higher than its book value. 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. 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: How Buybacks Warps The Price-To-Book Ratio
Companhia Paranaense de Energia (NYSE:ELP) is currently trading at $20.81 per share, a 2.7% increase. At 132,463 shares, the company's volume so far today is 0.3 times its current three-month average. If a stock price moves on high volume, this means that the change is a significant one. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. 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 ELP is 7.4, below the industry average of 10.67. A low P/E might arise due to substantial inherent risk of the firm and its operations, poor return on equity, or improper valuation of the market. 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
Currently trading at $13.76 per share, Clean Energy (Nasdaq:CLNE) has fallen 2.5%. The company's volume for the day so far is 350,599 shares. Volume is an important indicator because it indicates how significant a price shift is. 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. CLNE has a high P/S ratio of 6.1. This could be a good sign if the share price increases. It is important to compare P/S ratios for companies in the same industry, as ratios can vary quite widely for companies in different industries.
Atlas (NYSE:ATLS) has risen 2.4% to hit a current price of $32.17 per share. At 43,517 shares, the company's volume so far today is 0.2 times its current daily average. 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. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. The debt ratio measures the leverage of a company, and a company's leverage is a good way to assess risk. The debt ratio for ATLS is 82.3%, which is relatively high. 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. 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.
After rising 1.7%, Targa (NYSE:TRGP) is currently trading at a share price of $44.79. So far today, 108,795 shares of the company's stock have changed hands. A stock's volume conveys how excited investors are about it. 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 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. TRGP's D/E ratio of 1048% is on the high side. Companies with high D/E ratios may have difficulty attracting additional investment capital. The D/E ratio is not a pure measurement of a company's debt because it includes operational liabilities in total liabilities.
Edison (NYSE:EIX) has fallen 1.5% and is currently trading at $45.49 per share. The company's volume for the day so far is 1.3 million shares, 0.7 times the average volume over the last three months. In technical analysis, trading volume is used to determine the strength of a market indicator. 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 capitalization ratio is calculated by dividing long-term debt by the sum of long-term debt and shareholders' equity. EIX has a capitalization ratio of 55.4%, which is on the high end. 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.
After an increase of 1.4%, Gas Natural (NYSE:GAS) has reached a current price of $41.08. The company is currently trading a volume of 201,219 shares. 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 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 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. GAS has a P/B ratio of 1.41 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. 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: Using The Price-To-Book Ratio To Evaluate Companies
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.
Outperforming the market overall, the Utilities sector (XLU) is up 0.3% and its biggest movers so far today are:
| Company | Market Cap | Percentage Change |
| PAA Natural Gas Storage, L.P. (NYSE:PNG) | $1.57 billion | -2.8% |
| Companhia Paranaense de Energia (ADR) (NYSE:ELP) | $5.54 billion | +2.7% |
| Clean Energy Fuels Corp. (Nasdaq:CLNE) | $1.22 billion | -2.5% |
| Atlas Energy LP (NYSE:ATLS) | $1.61 billion | +2.4% |
| Targa Resources Corp (NYSE:TRGP) | $1.87 billion | +1.7% |
| Edison International (NYSE:EIX) | $15.05 billion | -1.5% |
| Gas Natural Group (NYSE:GAS) | $4.75 billion | +1.4% |
PAA Natural Gas Storage (NYSE:PNG) is currently trading at a share price of $18.05, a 2.8% decline. So far today, the company's volume is 84,732 shares. At this rate, trading activity will likely be down from yesterday when 227,481 shares changed hands. If a stock price makes a big move up or down, volume lets us know the significance of that move. Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. The price/book value ratio, often expressed simply as "price-to-book", provides investors a way to compare the market value, or what they are paying for each share, to a conservative measure of the value of the firm. PNG's P/B ratio of 1.21 shows that its share price is higher than its book value. 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. 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: How Buybacks Warps The Price-To-Book Ratio
Companhia Paranaense de Energia (NYSE:ELP) is currently trading at $20.81 per share, a 2.7% increase. At 132,463 shares, the company's volume so far today is 0.3 times its current three-month average. If a stock price moves on high volume, this means that the change is a significant one. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. 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 ELP is 7.4, below the industry average of 10.67. A low P/E might arise due to substantial inherent risk of the firm and its operations, poor return on equity, or improper valuation of the market. 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
Currently trading at $13.76 per share, Clean Energy (Nasdaq:CLNE) has fallen 2.5%. The company's volume for the day so far is 350,599 shares. Volume is an important indicator because it indicates how significant a price shift is. 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. CLNE has a high P/S ratio of 6.1. This could be a good sign if the share price increases. It is important to compare P/S ratios for companies in the same industry, as ratios can vary quite widely for companies in different industries.
After rising 1.7%, Targa (NYSE:TRGP) is currently trading at a share price of $44.79. So far today, 108,795 shares of the company's stock have changed hands. A stock's volume conveys how excited investors are about it. 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 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. TRGP's D/E ratio of 1048% is on the high side. Companies with high D/E ratios may have difficulty attracting additional investment capital. The D/E ratio is not a pure measurement of a company's debt because it includes operational liabilities in total liabilities.
Edison (NYSE:EIX) has fallen 1.5% and is currently trading at $45.49 per share. The company's volume for the day so far is 1.3 million shares, 0.7 times the average volume over the last three months. In technical analysis, trading volume is used to determine the strength of a market indicator. 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 capitalization ratio is calculated by dividing long-term debt by the sum of long-term debt and shareholders' equity. EIX has a capitalization ratio of 55.4%, which is on the high end. 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.
After an increase of 1.4%, Gas Natural (NYSE:GAS) has reached a current price of $41.08. The company is currently trading a volume of 201,219 shares. 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 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 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. GAS has a P/B ratio of 1.41 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. 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: Using The Price-To-Book Ratio To Evaluate Companies
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.
by
Investopedia Staff
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