The Nasdaq has moved up 0.4%, the S&P 500 is up 0.3% and the Dow has moved little so far today. The financial sector is the category of stocks containing firms that provide financial services to commercial and retail customers. This sector includes banks, investment funds, insurance companies and real estate. Financial services perform best in low interest rate environments. A large portion of this sector generates revenue from mortgages and loans, which gain value as interest rates drop. Furthermore, when the business cycle is in an upswing, the financial sector benefits from additional investments. Improved economic conditions usually lead to more capital projects and increased personal investing. New projects require financing, which usually leads to a larger number of loans.

The Financial sector (XLF) has climbed 0.5% overall, and these are the biggest movers in the sector so far:


CompanyMarket CapPercentage Change
Disco (NYSE:DFS)$19.06 billion+4.5%
IBERIABANK (Nasdaq:IBKC)$1.39 billion-3.1%
Annaly Capital Management (NYSE:NLY)$16.92 billion-3.1%
A.F.P Provida SA (NYSE:PVD)$1.95 billion+3%
Woori Finance Holdings Co., Ltd (NYSE:WF)$8.03 billion-2%
Capital One (NYSE:COF)$32.12 billion+1.7%
Westpac Banking Corporation (NYSE:WBK)$76.68 billion+1.6%
Forex Broker Summary: UFXMarkets

Disco (NYSE:DFS) is up 4.5% to reach a current price of $38.67 per share. The company's volume is currently 3.7 million shares for the day, 0.8 times the average daily volume. If a stock price moves on high volume, this means that the change is a significant one. 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/book value ratio is one of the more common methods of determining whether a stock is fairly valued. DFS' stock is trading for more than its book value with a P/B ratio of 2.24. 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 has its shortcomings but is still widely used as a valuation metric, more relevant for use by investors looking at capital-intensive or finance-related businesses, such as banks; book value does not carry much meaning for service-based firms with few tangible assets. SEE: Investment Valuation Ratios: Price/Book Value Ratio

IBERIABANK (Nasdaq:IBKC) is currently trading at a share price of $45.54, a 3.1% decline. The company's volume for the day so far is 116,129 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 dividend yield is measured by taking the annual dividends per share and dividing that number by the stock price. IBKC has a dividend yield of 2.9%. Just as with the yield on a bond or certificate of deposit, the higher the dividend yield, the higher the return to the investor. SEE: Dividend Yield For The Downturn

Falling 3.1%, Annaly Capital Management (NYSE:NLY) is currently at a share price of $16.82. With 7.3 million shares changing hands so far today, the company's volume is in keeping with its current three-month average. 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 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. While measuring a price/earnings ratio (P/E ratio) is a popular valuation technique, the measure cannot be calculated for companies without earnings, so some investors analyze the price/sales ratio. NLY has a high P/S ratio of 13.53. In young companies, a high P/S ratio is a sign of sales growth that is expected to turn into earnings and cash flow. 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.

Increasing 3%, A.F.P Provida SA (NYSE:PVD) is trading at $91.01 per share. So far today, the company's volume is 7,959 shares. This is a sign that there will be less trading activity than there was yesterday. Volume indicates the level of interest that investors have in a company at its current price. 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. Price/earnings ratios (P/E ratios) provide a measure of the relative value of a stock. PVD has a P/E ratio of 13.1. To determine the P/E ratio, an investor divides the market price of the stock by the earnings-per-share (EPS) of the stock. SEE: How To Find P/E And PEG Ratios

Woori Finance Holdings Co., Ltd (NYSE:WF) is down 2% to reach $29.27 per share. The company's volume is currently 2,286 shares for the day, 0.3 times the average daily volume. 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. The debt-equity (D/E) ratio compares the total liabilities for a company to its total shareholder equity. The D/E ratio for WF is 343%. Generally, a high D/E ratio means that the company may have difficulty generating enough cash to pay off its debts. The D/E ratio percentage provides a much more dramatic perspective on a company's leverage position than the debt ratio percentage.

Capital One (NYSE:COF) has risen 1.7% to hit a current price of $56.24 per share. The company is currently trading a volume of two million shares. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. 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. COF has a capitalization ratio of 48.3%. Prudent use of leverage (debt) increases the financial resources available to a company for growth and expansion.

Westpac Banking Corporation (NYSE:WBK) is at $128.16 per share after an increase of 1.6%. The company's volume for the day so far is 7,675 shares, in keeping with the average volume over the past three months. If a stock price makes a big move up or down, volume lets us know the significance of that move. Looking at a company's valuation ratios is a good way of getting a basic idea as to its value as an investment. The easy-to-calculate debt ratio is helpful to investors looking for a quick take on the leverage for a company. WBK's debt ratio of 93.4% is fairly high. As such, the company is highly leveraged and not highly liquid. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.

The Bottom Line The nature of the market is such that stocks will have good days and bad days. 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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Tickers in this Article: DFS, IBKC, NLY, PVD, WF, COF, WBK

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