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Tickers in this Article: CYT, MOS, ALB, GGC, RGLD, SLGN, SSD
The Nasdaq is up 0.1%, the S&P 500 has remained steady and the Dow has moved up 0.1% after the morning's trading. 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.

These are the biggest movers in the Basic Materials sector (XLB) (+0.4%):
CompanyMarket CapPercentage Change
Cytec Industries (NYSE:CYT)$3.12 billion-2.9%
Mosaic (NYSE:MOS)$18.44 billion-2.2%
Albemarle (NYSE:ALB)$4.78 billion-2.1%
Georgia (NYSE:GGC)$1.38 billion-2.1%
Royal Gold (Nasdaq:RGLD)$5.5 billion+2.1%
Silgan Holdings (Nasdaq:SLGN)$3.01 billion-2%
Simpson Manufacturing Co (NYSE:SSD)$1.4 billion+1.7%
Broker Summary: OptionsXpress Online Trading Platform

At $65.79, Cytec Industries (NYSE:CYT) has slipped 2.9%. At 174,777 shares, the company's volume so far today is with trading activity in keeping with yesterday's. Volume is an important indicator because it indicates how significant a price shift is. Investment valuation ratios can be very useful in determining the value of a stock, but it is very important to keep in mind that while some financial ratios have general rules (or a broad application), in most instances it is a prudent practice to look at a company's historical performance and use peer company/industry comparisons to put any given company's ratio in perspective. 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. CYT has a PEG ratio of 1.64, which is consistent 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.

Mosaic (NYSE:MOS) is currently trading at a share price of $58.35, a 2.2% decline. This morning, the company is trading a volume of 1.8 million 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. 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 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. MOS' stock is trading for more than its book value with a P/B ratio of 2.07. This may be a sign that the company is overvalued. A weakness of the P/B value ratio is that while the price component is easily determined by looking at the stock quote, the book value component is more difficult to estimate and more open to individual interpretation and analysis. SEE: How Buybacks Warps The Price-To-Book Ratio

Albemarle (NYSE:ALB) is trading at $52.32 per share, down 2.1%. With 499,046 shares changing hands so far today, the company's volume is consistent with its average over the last three months. 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. Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. Dividend yield is a way to measure how much cash flow you are getting for each dollar invested in an equity position - in other words, how much "bang for your buck" you are getting from dividends. ALB's dividend yield of 1.5% is fairly low. If you are an income investor, this stock may not be attractive to you. A stock's dividend yield depends on the nature of a company's business, its posture in the marketplace (value or growth oriented), its earnings and cash flow, and its dividend policy. SEE: Due Diligence On Dividends

Georgia (NYSE:GGC) has decreased to $39.15 per share, a 2.1% fall. The company's volume for the morning is 133,383 shares. This is 0.2 times its current daily average. High volume indicates a lot of investor interest while low volume indicates the opposite. 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. A price/sales ratio is derived by dividing stock market price by company sales. The P/S ratio for GGC is 0.26, which is relatively low. The lower the P/S ratio, the more reasonably price the stock, all else being equal. All things being equal, a low P/S ratio is good news for investors, while a very high one can be a warning sign.

Royal Gold (Nasdaq:RGLD) has risen 2.1% and is currently trading at $95.43 per share. This morning, 286,126 shares have been traded, on pace to finish the day below yesterday's volume of 1.2 million shares. In technical analysis, trading volume is used to determine the strength of a market indicator. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. The easy-to-calculate debt ratio is helpful to investors looking for a quick take on the leverage for a company. RGLD has a debt ratio of 22.5%, which is fairly low. A low debt ratio means the company has more available cash flow. However, one thing to note with this ratio: it isn't a pure measure of a company's debt (or indebtedness), as it also includes operational liabilities, such as accounts payable and taxes payable.

Slipping 2%, Silgan Holdings (Nasdaq:SLGN) is currently trading at $42.50 per share. So far today, 69,756 shares have changed hands. 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 debt-equity (D/E) ratio is a leverage ratio. SLGN has a D/E ratio of 270%, which is relatively high. Companies in capital-intensive industries usually have higher D/E ratios because they need to buy more property, plants, and equipment to operate. The D/E ratio is not a pure measurement of a company's debt because it includes operational liabilities in total liabilities.

Simpson Manufacturing Co (NYSE:SSD) is at $29.40 per share after an increase of 1.7%. The company's volume for the day so far is 69,526 shares, 0.4 times the current three-month average. The trading volume for a stock indicates the level of investor interest. Investment valuation ratios can be very useful in estimating whether a stock price is too high, reasonable or a bargain investment opportunity. Price/earnings ratios (P/E ratios) provide a measure of the relative value of a stock. The P/E ratio for SSD is 29.2, above the industry average of 26.69. Usually, if a stock has a high P/E ratio, it indicates that the market expects the company to grow earnings quickly in the future. 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: Profit With The Power Of Price-To-Earnings

The Bottom Line On any given day, a particular stock may see positive or negative change in its share price. Daily stock performance should be weighed against historical performance and put in context of the market overall. However, these fundamental metrics must be analyzed with historic data, industry information in addition to firm specific financial statements.

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