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Tickers in this Article: ORA, CPL, ELP, ATO, ALE, EIX, EOC
The market has been slipping so far today. The Nasdaq is trading down 0.1%; the S&P 500 has declined 0.1%; and the Dow has fallen 0.1%. 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 0.3%, and its current biggest movers are:
CompanyMarket CapPercentage Change
Ormat Technologies (NYSE:ORA)$908.2 million-1.9%
CPFL Energia S.A (NYSE:CPL)$10.55 billion-1.1%
Companhia Paranaense de Energia (NYSE:ELP)$5.2 billion+1.1%
Atmos (NYSE:ATO)$3.19 billion-1%
ALLETE (NYSE:ALE)$1.58 billion+0.9%
Edison (NYSE:EIX)$14.2 billion-0.9%
Empresa Nacional de Electricidad (NYSE:EOC)$13.38 billion+0.8%
Forex Broker Summary: UFXMarkets

Currently trading at $19.61 per share, Ormat Technologies (NYSE:ORA) has fallen 1.9%. So far today, the company's volume is 31,609 shares. This is in keeping with its current daily average. Volume indicates the level of interest that investors have in a company at its current price. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. The capitalization ratio measures the debt component of the capital structure, or capitalization of a company (i.e., the sum of long-term debt liabilities and shareholder equity) to support operations and growth. ORA's capitalization ratio of 50.4% is relatively high. The company may have trouble meeting operating and debt liabilities on time and surviving adverse economic conditions. The capitalization ratio is one of the more meaningful debt ratios because it focuses on the relationship of debt liabilities as a component of a company's total capital base, which is the capital raised by shareholders and lenders.

Slipping 1.1%, CPFL Energia S.A (NYSE:CPL) is currently trading at $21.68 per share. So far today, 167,876 shares have changed hands, consistent with the volume from yesterday on pace to finish the day below yesterday's volume of 411,290 shares. The trading volume for a stock indicates the level of investor interest. 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. One of the favorite tools of many value investors is analyzing price/book value ratios, as it provides a measure of the underlying value of a company's assets as compared to the valuation of its equity. CPL's stock is trading for more than its book value with a P/B ratio of 3.02. 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. 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

Companhia Paranaense de Energia (NYSE:ELP) has risen 1.1% and is currently trading at $19.22 per share. The company is currently trading a volume of 242,040 shares. Volume is an important indicator because it indicates how significant a price shift is. Valuation ratios allow the investor to make a quick determination as to a company's investment value. One of the most important estimates of stock market valuation is the price/earnings ratio (P/E ratio). Relative to the industry P/E ratio of 8.93, ELP's 7.3 is low. 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 P/E ratio indicates a stock that is expensive, while a low P/E ratio indicates a stock that is cheap. SEE: Profit With The Power Of Price-To-Earnings

After a decline of 1%, Atmos (NYSE:ATO) has hit a share price of $35.09. At 202,919 shares, the company's volume so far today is consistent with its average over the last three months. 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. 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. PEG ratio for ATO is 2.96. 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.

ALLETE (NYSE:ALE) has increased to a share price of $41.56, a 0.9% rise. The company's volume for the morning is 62,180 shares. This is in keeping with its current daily average. In technical analysis, trading volume is used to determine the strength of a market indicator. Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. Dividend yield is a way to measure how much cash flow you are getting for each dollar invested in an equity position - in other words, how much "bang for your buck" you are getting from dividends. ALE has a dividend yield of 4.5%. To calculate the dividend yield, divide the level of dividends by the stock price; the higher the yield, the more attractive the security. SEE: Dividend Yield For The Downturn

Edison (NYSE:EIX) is trading at $43.21 per share, down 0.9%. At 747,863 shares, the company's volume so far today is with trading activity in keeping with yesterday's lighter than yesterday's volume of 1.8 million shares. Volume is an important indicator in technical analysis as it is used to measure the worth of a market move. If the markets have made a strong price move either up or down the perceived strength of that move depends on the volume for that period. The higher the volume during that price move the more significant the move. 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/sales ratio measures a company's stock market price by its revenues. EIX's P/S ratio of 1.17 is on the high side. This could be a good sign if the share price increases. It is important to keep in mind when looking at the P/S ratio that just because a company is generating revenues, this does not mean that the company is profitable, and in the long run, profits drive stock prices.

After rising 0.8%, Empresa Nacional de Electricidad (NYSE:EOC) is currently trading at a share price of $49.31. So far today, 14,383 shares have changed hands. A stock's volume conveys how excited investors are about it. 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 measures the leverage of a company, and a company's leverage is a good way to assess risk. EOC has a debt ratio of 59.6%. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.

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.

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