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Tickers in this Article: UAN, UFS, ATI, RNF, HAYN, CRS, AEM
The market has been slipping so far today. The Nasdaq has slipped 0.2%; the S&P 500 has fallen 0.1%; and the Dow has declined 0.1%. 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.

The Basic Materials sector (XLB) is currently lagging behind the overall market, down 0.4%, and its current biggest movers are:
CompanyMarket CapPercentage Change
CVR Partners LP (NYSE:UAN)$1.82 billion+3.9%
Domtar Corp. (USA) (NYSE:UFS)$3.08 billion+3.2%
Allegheny Technologies Incorporated (NYSE:ATI)$3.23 billion-3.2%
Rentech Nitrogen Partners LP (NYSE:RNF)$1.13 billion+3%
Haynes International, Inc. (Nasdaq:HAYN)$600.7 million-2.1%
Carpenter Technology Corporation (NYSE:CRS)$2.45 billion-2.1%
Agnico-Eagle Mines Limited (USA) (NYSE:AEM)$7.39 billion+2%
Forex Broker Summary: Forex Capital Markets (FXCM)

After rising 3.9%, CVR (NYSE:UAN) is currently trading at a share price of $25.93. So far today, the company's volume is 154,735 shares. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. 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. The capitalization ratio is calculated by dividing long-term debt by the sum of long-term debt and shareholders' equity. UAN has a low capitalization ratio of 20.7%. Investors generally consider a company with low debt and high equity levels is a good quality investment. A low level of debt and a healthy proportion of equity in a company's capital structure is an indication of financial fitness.

Domtar Corp (NYSE:UFS) has risen 3.2% and is currently trading at $74.72 per share. The company's volume is currently 145,000 shares for the day, 0.4 times the current three-month average. In technical analysis, trading volume is used to determine the strength of a market indicator. 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 price/book value ratio is especially important for value investors as it can provide an indication of the true value of a company's assets at a time when its business model may be failing. UFS' stock is trading for less than its book value as can be seen from it's P/B value of 0.9. This is due to one of two possibilities: that the stock is being unfairly or incorrectly undervalued by investors because of some transitory circumstance and represents an attractive buying opportunity at a bargain price or that the market's low opinion and valuation of the company are correct, at least over the foreseeable future. One problem with the P/B value ratio is that it can be difficult to calculate the true book value of a company, so investors should be aware that many measures of book value may provide only a rough estimate, and should be taken with a grain of salt. SEE: How Buybacks Warps The Price-To-Book Ratio

Allegheny Technologies (NYSE:ATI) is currently trading at a share price of $29.22, a 3.2% decline. So far today, the company's volume is 397,140 shares. This is 0.2 times the average daily volume. Price change alone is not enough to know how a stock is doing. Volume is an important secondary indicator used to confirm trends suggested by price movement. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. The price/earnings to growth (PEG) ratio can reveal value what price/earnings (P/E) ratios alone may not so that if a company has a high P/E ratio (an indication that its stock is overpriced) but its earnings are growing very quickly, the PEG ratio may reveal that the company is actually fairly valued, or perhaps even a bargain. PEG ratio for ATI is consistent with the industry average at 1.09. Because of the adjustment for earnings growth rate, the PEG ratio is somewhat more useful than many formulas for comparing companies in different industries.

Rising 3%, Rentech Nitrogen (NYSE:RNF) is currently trading at $30.50 per share. So far today, 353,195 shares have changed hands,. When a stock price moves up or down, watching the volume is a good way of identifying how significant that shift is. 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. The P/E ratio has been used for ages by analysts and still remains one of the most relevant pieces of stock valuation. RNF's P/E ratio of 98.7 is above the industry average of 7.7. This could mean that the market is expecting big things over the next few months or years. 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: Can Investors Trust the P/E Ratio?

Haynes International (Nasdaq:HAYN) has fallen 2.1% and is currently trading at $47.85 per share. So far today, 11,440 shares have changed hands. 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 dividend yield is calculated by dividing a company's dividends per share by its stock price. HAYN's dividend yield of 1.8% is fairly low. This could indicate that that the stock is overpriced or that future dividends might be higher. A higher dividend yield may indicate a risk of a fall in the price of the security, or a cut in the level of dividend payments, either of which would have the effect of dropping future returns. SEE: Dividend Yield For The Downturn

Carpenter (NYSE:CRS) has decreased to $45.77 per share, a 2.1% fall. So far today, the company's volume is 60,429 shares, 0.2 times its current three-month average. Volume is an important indicator because it indicates how significant a price shift is. 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 price/sales ratio measures a company's stock market price by its revenues. CRS has a high P/S ratio of 1.46. This could be a good sign if the share price increases. 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.

Agnico-Eagle Mines Limited (NYSE:AEM) is at $44.01 per share after an increase of 2%. The company's volume for the morning is 776,098 shares. This is 0.4 times its average daily volume. The trading volume for a stock indicates the level of investor interest. Understanding investment valuation ratios allows an investor to assess the true value of an individual stock. The debt ratio measures the leverage of a company, and a company's leverage is a good way to assess risk. AEM's debt ratio of 34.9% is on the low side. 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.

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. 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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