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Tickers in this Article: HAYN, MCP, MLI, IFF, PKG, AGU, SLGN
The market is doing well so far today. The Nasdaq is up 0.6%; the S&P 500 has risen 0.8%; and the Dow has climbed 1.1%. The basic materials sector is the category of stocks that accounts for companies involved with the discovery, development and processing of raw materials. This sector includes the mining and refining of metals, chemical producers and forestry products. The basic materials sector is sensitive to changes in the business cycle. Because the sector supplies materials for construction, it depends on a strong economy. This sector is also sensitive to supply and demand fluctuations because the price of raw materials, such as gold or other metals, is largely demand driven.

Outperforming the market overall, the Basic Materials sector (XLB) is up 1.1% and its biggest movers so far today are:
CompanyMarket CapPercentage Change
Haynes International (Nasdaq:HAYN)$640.8 million+4.4%
Molycorp (NYSE:MCP)$1.27 billion-3.6%
Mueller Industries (NYSE:MLI)$1.74 billion+3.4%
International Flavors & Fragrances Inc (NYSE:IFF)$4.85 billion+2.1%
Packaging Corp Of (NYSE:PKG)$3.56 billion-1.8%
Agrium Inc (NYSE:AGU)$16.35 billion+1.8%
Silgan Holdings (Nasdaq:SLGN)$3.02 billion-1.8%
Broker Summary: Fidelity Online Brokerage

After an increase of 4.4%, Haynes International (Nasdaq:HAYN) has reached a current price of $54.47. So far today, the company's volume is 18,385 shares, 0.2 times its average over the past three months. The trading volume for a stock indicates the level of investor interest. 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. The capitalizion ratio of 0.4% is on the low end. A low capitalization ratio can signify a failure to leverage equity into investment, missing valuable opportunities for growth and expansion. A low level of debt and a healthy proportion of equity in a company's capital structure is an indication of financial fitness.

Molycorp (NYSE:MCP) has fallen 3.6% and is currently trading at $11.09 per share. So far today, 2.7 million shares of the company's stock have changed hands. This is on pace to reach yesterday's trading volume of five 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. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. 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. The P/S ratio for MCP is 5.16, which is relatively high. 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.

Mueller Industries (NYSE:MLI) is at $47.01 per share after an increase of 3.4%. So far today, the company's volume is 151,441 shares, 0.9 times the average daily volume. In technical analysis, trading volume is used to determine the strength of a market indicator. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. The easy-to-calculate debt ratio is helpful to investors looking for a quick take on the leverage for a company. MLI's debt ratio of 28.9% is on the low side. In other words, the company is less sensitive to changes in business or interest rates since less of its cash flow is dedicated to paying off loan expenses. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.

International Flavors & Fragrances Inc (NYSE:IFF) is up 2.1% to reach a current price of $60.81 per share. So far today, 213,583 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 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. IFF has a D/E ratio of 71%. This easy-to-calculate ratio provides a general indication of a company's equity-liability relationship and is helpful to investors looking for a quick take on a company's leverage.

Packaging Corp Of (NYSE:PKG) is trading at $35.63 per share, down 1.8%. At 525,457 shares, the company's volume so far today is 0.4 times the average volume over the last three months. High volume indicates a lot of investor interest while low volume indicates the opposite. While investment valuation ratios are useful tools in estimating the attractiveness of an investment, remember that it is important to look at a company's historical performance and compare the company ratios with its competitors and industry overall. 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. PKG has a P/B ratio of 3.79 which shows that its share price is higher than its book value. This implies that investors expect management to create more value from a given set of assets and/or that the market value of the firm's assets is significantly higher than their accounting value. 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

Rising 1.8%, Agrium Inc (NYSE:AGU) is currently trading at $105.35 per share. So far today, the company's volume is 665,469 shares. As a stock moves up or down, it is important to pay attention to the trading volume. This indicates the level of interest: the higher the volume, the more the interest. Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. Price/earnings ratios (P/E ratios) provide a measure of the relative value of a stock. Compared to the industry average of 9.36, AGU's P/E ratio of 10.9 is quite high. This could mean that the market is expecting big things over the next few months or years. A high or low P/E ratio is not good or bad in and of itself, but a company trading with a high P/E ratio must continue to post strong financial performance or its stock price is likely to fall. SEE: How To Find P/E And PEG Ratios

Currently trading at $42.73 per share, Silgan Holdings (Nasdaq:SLGN) has fallen 1.8%. So far today, the company's volume is 103,517 shares, consistent with its current daily average. Volume indicates the level of interest that investors have in a company at its current price. Investment valuation ratios can be very useful in estimating whether a stock price is too high, reasonable or a bargain investment opportunity. When used consistently and uniformly, the price/earnings to growth (PEG) ratio is an essential tool that adds dimension to the price/earnings ratio, allows comparisons across diverse industries and is always on the lookout for value. PEG ratio for SLGN is 2.67. 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.

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. 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.

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