The volume of a stock reflects the activity of buyers and sellers and each unit of volume in the market shows the activity of two persons: one has sold the shares, and another one has bought, similarly for derivatives - one has sold a contract, and other has bought a contract. Daily volume reflects the number of shares or contract traded in a specific day.
Some traders neglect the importance of volume, as they are under the impression that the market is efficient, and prices reflect all the available information of the stock. They belong to the school of thought whose beliefs are in the efficient market hypothesis, and they say that one gets paid on price, not on volume.
However, professional traders are well aware of the fact that analysing volume gives them an understanding of the market depth and helps to trade better.
Here, we are going to discuss top-five leaders on the broader index of the LSE:
- LLOYD Banking Group Plc
London stock exchange-traded LLOYD Banking Group Plc (LON: LLOY) is the UK's second-largest bank by market capitalisation. The outstanding market capitalisation of the bank stood at £41.4bn, with 70.04bn shares in issue. In the year-over period, shares of LLOY delivered a price return of approximately 6.7% and handed gains of around 15% on a year-to-date basis, whereas benchmark FTSE 100 index delivered a price return of 4.53% on a YoY basis and approximately 8% on a YTD basis. The bank’s relative price increase is 2.2% on a YoY basis and 7% on a YTD basis, respectively.
Shares of LLOY were the most active in terms of volume at the LSE as on November 20, 2019. The average volume traded in LLOY shares was approximately 17.6% lower against the average daily volume traded in the past 30-days. However, despite a marginal fall in its share price over the past couple of days, it's still trading above its short-term and long-term crucial support levels of 50-day and 200-day simple moving averages
Also, despite a relatively higher performance against the benchmark FTSE 100, stock of LLOY recorded on a YoY basis, and YTD basis, the dividend yield of LLOY stood at 5.52%, substantially higher against the FTSE 100’s dividend yield of 4.6%.
From the valuation standpoint, in terms of Price-to-Book Value ratio, shares of LLOY traded at 0.86x against the peer average of 0.51x, in terms of Price-to-free cash flow ratio, shares of LLOY traded at 39.62x of its free cash flow per share, whereas peers average Price-to-Free cash flow ratio stood at 12.81x, that reflects shares of LLOY are trading at a relatively premium valuation against its peer group companies.
- Centrica Plc
FTSE 100 constituent Centrica Plc (LON: CNA) is the UK's fourth-largest water, gas and multi-utilities company in terms of the market capitalisation. The outstanding market capitalisation of the group stood at £4.23bn, with 5.82 shares in issue.
Shares of CNA tumbled more than 50% in a year-over period and around 46% in a year-to-date basis, however, the trend has reversed in the past three months as its shares have strengthened by approximately 13% in the past three months and 4% in the past one month time, respectively.
Shares of CNA were also among the top five active stocks at the London Stock Exchange as of November 20 and traded 1.17% lower at GBX 72.70, reflecting sellers outnumbered buyers. Also, its shares traded well below its long-term crucial support level of a 200-day simple moving average.
The dividend yield of the company stood at 13.62% ranking it among the top higher dividend yield FTSE 100 stocks at the LSE; however, steep plunge in its share price in the year-over period could be the reason behind higher dividend yield.
However, from the valuation standpoint, it reflects that the sector (Utility) of which the company belongs to is relatively undervalued against the broader benchmark FTSE 100, as in terms of Price-to-Earnings ratio, the Utility sector is trading at an LTM PE ratio of 14.5x, whereas broader FTSE 100 was trading at a PE ratio of 15.17x.
- Vodafone Group Plc
Vodafone Group Plc (LON: VOD) is the largest telecommunication provider in terms of market cap and is also a constituent stock of the FTSE 100 index. The outstanding market capitalisation of the group stood at £40.8bn with 26.77bn shares in issue.
Its shares have delivered a marginally lower return on a YoY basis, declining more than 5% in the past one-month and slumping more than 7% in the past five trading session. Shares of VOD were also among the top five active stocks traded on the LSE as on November 21 and ended the session 0.54% lower at GBX 152.42.
The five days average trading volume in the stock was 62% above than the 30-days average traded volume in the stocks, and prices have tumbled during the period, reflecting sellers have outnumbered the buyers.
Shares of Vodafone also traded well-below its immediate support levels of 20-day, 30-day and 50-day simple moving averages.
The dividend yield of Vodafone Group Plc stood at 4.94%, slightly above the FTSE 100 dividend yield of 4.6%.
- Barclays Plc
Barclays Plc (LON: BARC) is the UK's third-largest bank in terms of market capitalisation, listed on the main market of the London Stock Exchange. The group is also a constituent of the FTSE 100 companies. The outstanding market capitalisation of the bank stood at £29.32bn, which ranks it among the large-cap companies listed and traded at the London Stock Exchange.
Shares of Barclays have delivered a price return of 4.74% in a year-over period, surged 12.4% on a YTD basis and was up around 22% in the past three-month time. However, they declined marginally in the past five trading sessions.
Shares of BARC were among the top five active stocks in terms of volume at the London Stock Exchange as of November 20 and ended 0.72% lower at GBX 169.20.
From the valuation standpoint, particularly in terms of price-to-book multiple, shares of BARC traded at 0.44x of book value per share, whereas industry average P/BV multiple of 0.51x, reflects that the stock is trading at a discounted valuation against the industry peers.
- BP Plc
London-stock exchange-traded BP Plc (LON: BP.) is the UK's largest oil and gas producer in terms of market capitalisation. The outstanding market capitalisation of the group stood at £100.9bn with 20.30bn shares in issue.
Its shares have delivered a negative return of 4.2% on a YoY basis, increased marginally in the past one-month and slumped by around 3% in the past five trading session. Shares of BP were also among the top five active stocks traded on the LSE as on November 20 and ended the session 0.96% lower at GBX 493.20.
The five days average trading volume in the stock was 3% above the 30-days average traded volume in the stock, and prices have tumbled during the period, reflecting sellers have outperformed buyers.
Also, shares of BP traded well-below its short-term and long-term support levels of 20-day, 30-day, 50-day and 200—day simple moving averages.
The dividend yield of BP Plc stood at 6.93%, well above the FTSE 100’s dividend yield of 4.6%.
However, from the valuation standpoint, particularly in terms of price-to-earnings ratio, shares of BP Plc traded at a PE multiple of 27.33x, whereas industry average PE multiple stood at 10.08X, reflecting shares of BP Plc trading at a substantially higher premium against the peers.
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