Filed Under: ,
Tickers in this Article: VCRA, MKSI, ILMN, AYI, FEIC, VMW, MLNX
The Nasdaq has risen 0.4%, the S&P 500 has moved up 0.1% and the Dow has slipped 0.2% so far today. The technology sector is a category of stocks relating to the research, development and/or distribution of technologically based goods and services. This sector contains businesses revolving around the manufacturing of electronics, creation of software, computers or products and services relating to information technology. The technology sector offers a wide arrange of products and services for both customers and other businesses. Consumer goods like personal computers, stereos and televisions are continually improved and upgraded, offering the latest technology to all users. Businesses receive information and services from software and database systems, which allow the companies to make strategic business decisions.

The Technology sector (XLK) has increased 0.2% overall, and these are the biggest movers in the sector so far:
CompanyMarket CapPercentage Change
Vocera Communications (NYSE:VCRA)8.6 million-5.3%
MKS Instruments (Nasdaq:MKSI).33 billion-5.3%
Illumina (Nasdaq:ILMN).03 billion+4.8%
Acuity Brands (NYSE:AYI).67 billion-4.3%
FEI (Nasdaq:FEIC).01 billion-3.8%
VMware (NYSE:VMW).87 billion+2%
Mellanox (Nasdaq:MLNX).02 billion+2%
Beginner's Guide To NinjaTrader Trading Software

Vocera Communications (NYSE:VCRA) has decreased to $29.40 per share, a 5.3% fall. The company's volume is currently 332,782 shares for the day, two times the current three-month average. If a stock price moves on high volume, this means that the change is a significant one. Understanding investment valuation ratios allows an investor to assess the true value of an individual stock. The debt ratio shows the proportion of assets that a company is financing through debt. VCRA has a low debt ratio of 31.9%. 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.

MKS Instruments (Nasdaq:MKSI) is down 5.3% to reach $23.81 per share. So far today, the company's volume is 221,870 shares. This is more trading activity than there was yesterday. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. 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/earnings ratio is calculated by taking a stock price and dividing it by the earnings-per-share (EPS). The P/E ratio for MKSI is 14.2, above the industry average of 3.84. 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. High P/E stocks could be "growth" stocks, while low PE stocks may be "value" stocks. SEE: How To Find P/E And PEG Ratios

Rising 4.8%, Illumina (Nasdaq:ILMN) is currently trading at $51.39 per share. The company's volume is currently 5.9 million shares for the day, 3.6 times the average daily volume. If a stock price moves on high volume, this means that the change is a significant one. Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. 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. ILMN's D/E ratio is 70%. The D/E ratio is not a pure measurement of a company's debt because it includes operational liabilities in total liabilities.

Acuity Brands (NYSE:AYI) is trading at $60.37 per share, down 4.3%. So far today, 680,999 shares have changed hands. 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. The capitalization ratio is calculated by dividing long-term debt by the sum of long-term debt and shareholders' equity. AYI has a capitalization ratio of 30.1%. This ratio is considered to be one of the more meaningful of the "debt" ratios - it delivers the key insight into the use of leverage by a company.

FEI (Nasdaq:FEIC) has fallen 3.8% and is currently trading at $50.85 per share. The company's volume for the day so far is 423,790 shares, 1.2 times its average over the past three months. 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 price/earnings to growth (PEG) ratio divides a company's P/E ratio by its growth rate of earnings-per-share. FEIC's PEG ratio of 1.43 is in line with the industry average. Because of the adjustment for earnings growth rate, the PEG ratio is somewhat more useful than many formulas for comparing companies in different industries.

VMware (NYSE:VMW) has increased to a share price of $95.36, a 2% rise. So far today, 1.1 million shares of the company's stock have changed hands. This is on pace to reach yesterday's trading volume of 2.3 million shares. If a stock is trading on low volume, then there is not much interest in the stock. On the other hand, if a stock is trading on high volume, then there is a lot of interest in the stock. Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. The price/book value ratio is calculated by dividing the current stock price by the company's book value per share. VMW's stock is trading for more than its book value with a P/B ratio of 7.64. 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. To put things in perspective, should be made among companies in the same industry rather than across industries. SEE: Investment Valuation Ratios: Price/Book Value Ratio

Mellanox (Nasdaq:MLNX) has risen 2% to hit a current price of $103.07 per share. At 323,809 shares, the company's volume so far today is 0.3 times the average daily volume. Volume is an important indicator because it indicates how significant a price shift is. In making a decision about a potential or existing investment, valuation ratios are useful as a basis for seeing whether the stock price is too high, reasonable, or a bargain. The price/sales ratio measures a company's stock market value by its total revenues or alternatively, a company's price per share by its revenue per share. MLNX has a high P/S ratio of 7.91. In young companies, a high P/S ratio is a sign of sales growth that is expected to turn into earnings and cash flow. 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.

The Bottom Line The nature of the market is such that stocks will have good days and bad days. It is important to weigh current activity against historical performance when making any investment decisions. 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.

comments powered by Disqus

Trading Center