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Tickers in this Article: GEF, BBL, GEF.B, BHP, LYB, DEL, SYT
The Nasdaq is down 0.9%, the S&P 500 has decreased 0.7% and the Dow has declined 0.7%, marking a bad morning for the market. 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 down 0.7%, outperforming the market overall. Currently, the biggest movers in the sector are:
CompanyMarket CapPercentage Change
Greif (NYSE:GEF)$1.92 billion+7%
BHP Billiton plc (NYSE:BBL)$161.48 billion-3.6%
Greif (NYSE:GEF.B)$1.04 billion+3.5%
BHP Billiton (NYSE:BHP)$180.14 billion-3.4%
LyondellBasell (NYSE:LYB)$27.19 billion+3.3%
Deltic (NYSE:DEL)$792.2 million-3.1%
Syngenta AG (NYSE:SYT)$31.7 billion-2.7%
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After rising 7%, Greif (NYSE:GEF) is currently trading at a share price of $43.56. So far today, 373,891 shares have changed hands, more than yesterday's 353,940 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. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. The debt ratio is calculated by dividing total liabilities by total assets. GEF has a debt ratio of 68.4%, which is on the high side. This means that the company's cash flow is significantly impacted by paying off principal and interest and that any negative change in performance or rise in interest rates could result in default. 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.

After a decline of 3.6%, BHP Billiton plc (NYSE:BBL) has hit a share price of $58.21. The company is currently trading a volume of 530,600 shares. Volume is used to evaluate how meaningful the price movement of a stock is. Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. Using price/earnings ratios (P/E ratios) does not give an indication of whether or not an individual company's ratio is reasonable, a shortcoming that can be corrected by using the price/earnings to growth ratio (PEG ratio). PEG ratio for BBL is 0.6. Because of the adjustment for earnings growth rate, the PEG ratio is somewhat more useful than many formulas for comparing companies in different industries.

Greif (NYSE:GEF.B) is up 3.5% to reach a current price of $48.50 per share. The company's volume for the day so far is 5,516 shares, 1.1 times the average volume 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. 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 dividend yield is calculated by dividing a company's dividends per share by its stock price. GEF.B's dividend yield is 5.4%. To calculate the dividend yield, divide the level of dividends by the stock price; the higher the yield, the more attractive the security. SEE: Investment Valuation Ratios: Dividend Yield

At $65.11, BHP Billiton (NYSE:BHP) has slipped 3.4%. The company's volume for the morning is 1.8 million shares. This is 1.1 times the current daily average. 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 debt ratio gives users a quick measure of the amount of debt that the company has on its balance sheets compared to its assets. BHP has a debt ratio of 48.8%, which is fairly low. 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.

Rising 3.3%, LyondellBasell (NYSE:LYB) is currently trading at $48.84 per share. This morning, 6.6 million shares have been traded, whereas yesterday, volume was only 3.1 million shares. The trading volume for a stock indicates the level of investor interest. Valuation ratios allow the investor to make a quick determination as to a company's investment value. The price/earnings to growth (PEG) ratio divides a company's P/E ratio by its growth rate of earnings-per-share. PEG ratio for LYB is consistent with the industry average at 1.27. 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.

Deltic (NYSE:DEL) has decreased to $60.61 per share, a 3.1% fall. So far today, the company's volume is 15,200 shares. If a stock is trading on low volume, then there is not much interest in the stock. On the other hand, if a stock is trading on high volume, then there is a lot of interest in the stock. 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 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. DEL has a low capitalization ratio of 20.7%. A very low capitalization ratio might be a sign that the company is stagnating and reducing the potential earnings for shareholders. This ratio is considered to be one of the more meaningful of the "debt" ratios - it delivers the key insight into the use of leverage by a company.

Slipping 2.7%, Syngenta AG (NYSE:SYT) is currently trading at $67.57 per share. With 99,762 shares changing hands so far today, the company's volume is one times its current three-month average. Volume indicates the level of interest that investors have in a company at its current price. Looking at a company's valuation ratios is a good way of getting a basic idea as to its value as an investment. The P/E ratio has been used for ages by analysts and still remains one of the most relevant pieces of stock valuation. The P/E ratio for SYT is 20.1, above the industry average of 16.13. Generally speaking, the higher the P/E ratio, the higher the market expectations for a company's future performance. 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: Investment Valuation Ratios: Price/Earnings Ratio

The Bottom Line On any given day, a particular stock may see positive or negative change in its share price. Paying close attention to the previous ratios will help you identify key times to adjust your strategy. 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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