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Tickers in this Article: HNP, CLNE, ATO, ATLS, CPL, PEG, ETP
It's been a bad day for the market after the morning's trading. The Nasdaq has slipped 0.2%; the S&P 500 is trading down 0.3%; and the Dow is down 0.2%. 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 ahead of the overall market, down only 0.2%, and its biggest movers are currently:
CompanyMarket CapPercentage Change
Huaneng Power International, Inc (NYSE:HNP)$9.84 billion+3.5%
Clean Energy (Nasdaq:CLNE)$1.22 billion-3.1%
Atmos (NYSE:ATO)$3.31 billion-2%
Atlas (NYSE:ATLS)$1.77 billion+1.9%
CPFL Energia S.A (NYSE:CPL)$11.12 billion-1.8%
PSE&G (NYSE:PEG)$16.53 billion-1.6%
Energy Transfer (NYSE:ETP)$10.74 billion-1.5%
Broker Summary: E-Trade Financial

Huaneng Power International, Inc (NYSE:HNP) has risen 3.5% and is currently trading at $29 per share. At 31,631 shares, the company's volume so far today is consistent with its average over the last three months. Volume is used to evaluate how meaningful the price movement of a stock is. 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. Using price/earnings ratios (P/E ratios) does not give an indication of whether or not an individual company's ratio is reasonable, a shortcoming that can be corrected by using the price/earnings to growth ratio (PEG ratio). HNP's PEG ratio is 6.23. 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.

Falling 3.1%, Clean Energy (Nasdaq:CLNE) is currently at a share price of $13.63. So far today, the company's volume is 483,094 shares. 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. The debt ratio measures the leverage of a company, and a company's leverage is a good way to assess risk. CLNE has a low debt ratio of 44.7%. This indicates that the company engages in conservative financing with opportunities to borrow in the future at no significant risk. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.

Currently trading at $35.97 per share, Atmos (NYSE:ATO) has fallen 2%. This morning, 152,873 shares have been traded,. If a stock price makes a big move up or down, volume lets us know the significance of that move. 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. For investors primarily interested in the income a stock can generate, the dividend yield is an important determinant of how attractive a stock is. ATO has a dividend yield of 3.8%. It is important to remember that dividends are only one component of a stock's return and capital appreciation (or decline) must also be considered when evaluating a security. SEE: Dividend Yield For The Downturn

Increasing 1.9%, Atlas (NYSE:ATLS) is trading at $35.08 per share. The company's volume for the morning is 90,566 shares. This is 0.3 times its average daily volume. 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. In a nutshell, the price/sales ratio shows how much Wall Street values every dollar of the company's sales. ATLS has a P/S ratio of 0.98, on the low end. Highly levered companies are likely to have lower P/S ratios because the price aspect of this ratio only measures stock market valuation while sales is a function of both stock market and bond market capitalization. A limitation of the P/S ratio is that the price component measures only stock market captialization, while sales are a function of the entire capital structure, potentially leading to wide differences between levered and unlevered companies.

After a decline of 1.8%, CPFL Energia S.A (NYSE:CPL) has hit a share price of $22.70. The company's volume for the day so far is 222,778 shares, consistent with its current three-month average. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. Investment valuation ratios can be very useful in estimating whether a stock price is too high, reasonable or a bargain investment opportunity. 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. CPL has a high D/E ratio of 220%. 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.

PSE&G (NYSE:PEG) is currently trading at a share price of $32.16, a 1.6% decline. So far today, 1.2 million shares have changed hands. 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. The price/book value ratio provides a way of evaluating whether a stock is relatively cheap or expensive. PEG has a P/B ratio of 1.53 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. 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: Investment Valuation Ratios: Price/Book Value Ratio

Energy Transfer (NYSE:ETP) has decreased to $43.10 per share, a 1.5% fall. At 1.1 million shares, the company's volume so far today is above yesterday's volume of 978,034 shares. A stock's volume conveys how excited investors are about it. Looking at a company's valuation ratios is a good way of getting a basic idea as to its value as an investment. The capitalization ratio is calculated by dividing long-term debt by the sum of long-term debt and shareholders' equity. ETP has a capitalization ratio of 58.1%, which is on the high end. If the company is a company is in a highly competitive business and hobbled by high debt, it will find its competitors taking advantage of its problems to grab more market share. 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. 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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