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Tickers in this Article: CLF, KWR, ATI, SON, BHP, CRS, NEM
The Nasdaq has moved up 0.3%, the S&P 500 has increased 0.6% and the Dow has risen 0.7% on a good day for the market so far. 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 up 0.9%, outperforming the market overall. The biggest movers in the sector so far are:
CompanyMarket CapPercentage Change
Cliffs Natural Resources (NYSE:CLF)$5.58 billion+8.2%
Quaker (NYSE:KWR)$652.9 million-4.3%
Allegheny Technologies (NYSE:ATI)$3.41 billion+3.6%
Sonoco Products (NYSE:SON)$3.12 billion-3.5%
BHP Billiton (NYSE:BHP)$179.53 billion+2.3%
Carpenter (NYSE:CRS)$2.7 billion+2.2%
Newmont Mining (NYSE:NEM)$25.23 billion+2.2%
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After rising 8.2%, Cliffs Natural Resources (NYSE:CLF) is currently trading at a share price of $42.40. So far today, 6.7 million shares of the company's stock have changed hands. This is a sign that there will be less trading activity than there was yesterday. High volume indicates a lot of investor interest while low volume indicates the opposite. Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a 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 CLF is 0.54. Because of the adjustment for earnings growth rate, the PEG ratio is somewhat more useful than many formulas for comparing companies in different industries.

Falling 4.3%, Quaker (NYSE:KWR) is currently at a share price of $48. At 39,004 shares, the company's volume so far today is 0.7 times the average volume over the last three months. When a stock price moves up or down, watching the volume is a good way of identifying how significant that shift is. 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. The price/earnings ratio is calculated by taking a stock price and dividing it by the earnings-per-share (EPS). KWR's P/E ratio of 14.4 is above the industry average of 5.73. Generally speaking, the higher the P/E ratio, the higher the market expectations for a company's future performance. 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 Use The P/E Ratio And PEG To Tell The Future Of A Stock

Allegheny Technologies (NYSE:ATI) is currently trading at $32.93 per share, a 3.6% increase. This morning, the company is trading a volume of 413,162 shares. The trading volume for a stock indicates the level of investor interest. A company's investment value can be 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 company's capitalization (not to be confused with its market capitalization) is the term used to describe the makeup of a company's permanent or long-term capital, which consists of both long-term debt and shareholders' equity. ATI's capitalization ratio is 36.4%. Prudent use of leverage (debt) increases the financial resources available to a company for growth and expansion.

Sonoco Products (NYSE:SON) is currently trading at a share price of $29.96, a 3.5% decline. So far today, the company's volume is 916,695 shares, 2.5 times its current daily average. Volume is used to evaluate how meaningful the price movement of a stock is. 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. SON's P/B ratio of 2.08 shows that its share price is higher than its book value. It is important to take the company's debt into account when using the P/B ratio as debt can boost a company's liabilities to the point where they wipe out much of the book value of its hard assets, creating artificially high P/B values. 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: Using The Price-To-Book Ratio To Evaluate Companies

After an increase of 2.3%, BHP Billiton (NYSE:BHP) has reached a current price of $68.66. So far today, the company's volume is 1.1 million shares. This is on pace to reach yesterday's trading volume of 2.3 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. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. 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. BHP's dividend yield is 3.4%. Simply comparing the level of dividends that two stocks pay does not give a true reflection of which security is more attractive, so investors calculate the dividend yield in order to standardize dividend payments. SEE: Dividend Yield For The Downturn

Rising 2.2%, Carpenter (NYSE:CRS) is currently trading at $52.50 per share. So far today, the company's volume is 279,232 shares, in keeping with the average volume over the past three months. 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. In a nutshell, the price/sales ratio shows how much Wall Street values every dollar of the company's sales. CRS has a high P/S ratio of 1.23. 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.

Newmont Mining (NYSE:NEM) has increased to a share price of $52.49, a 2.2% rise. So far today, the company's volume is 2.1 million shares. Volume is an important indicator because it indicates how significant a price shift is. Valuation ratios allow the investor to make a quick determination as to a company's investment value. 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. The debt ratio for NEM is 54.9%. 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.

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. However, these fundamental metrics must be analyzed with historic data, industry information in addition to firm specific financial statements.

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