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Biggest Capital Goods Sector Movers, Including CNH
The market is having a good day so far: the Nasdaq is trading up 0.1%; the S&P 500 has moved up 0.5%; and the Dow has risen 0.4%. The capital goods sector is the category of stocks related to the manufacture or distribution of goods. The sector is diverse, containing companies that manufacture machinery used to create capital goods, electrical equipment, aerospace and defense, engineering and construction projects. It is also referred to as the "industrials sector". Performance in the capital goods sector is sensitive to fluctuations in the business cycle. Because it relies heavily on manufacturing, the sector does well when the economy is booming or expanding. As economic conditions worsen, the demand for capital goods drops off, usually lowering the prices of stocks in the sector.
The Capital Goods sector (XLI) is down 0.1% on a good day for the market overall. The biggest movers in the sector so far are:
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Beacon Roofing Supply (Nasdaq:BECN) is trading at $24.56 per share, down 7.4%. The company's volume is currently 393,969 shares for the day, 0.7 times the average daily volume. If a stock price moves on high volume, this means that the change is a significant one. 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 provides a way of evaluating whether a stock is relatively cheap or expensive. BECN's P/B ratio of 1.98 shows that its share price is higher than its book value. This high share price relative to asset value is likely to indicate that the company has been earning a very high return on its assets. To put things in perspective, should be made among companies in the same industry rather than across industries. SEE: Using The Price-To-Book Ratio To Evaluate Companies
Rising 4.3%, Elbit Systems Ltd (Nasdaq:ESLT) is currently trading at $33.74 per share. The company's volume for the day so far is 1,600 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 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. Dividend yield measures the income that a stock will generate for an investor. Dividend yield for ESLT is 3.7%. Just as with the yield on a bond or certificate of deposit, the higher the dividend yield, the higher the return to the investor. SEE: Guide To Stock-Picking Strategies: Income Investing
Titan Machinery (Nasdaq:TITN) is down 4.1% to reach $27.26 per share. So far today, the company's volume is 148,838 shares, consistent with its average over the last three months. In technical analysis, trading volume is used to determine the strength of a market indicator. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. 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. TITN has a P/S ratio of 0.42, on the low end. Highly levered companies are likely to have lower P/S ratios because the price aspect of this ratio only measures stock market valuation while sales is a function of both stock market and bond market capitalization. It is important to keep in mind when looking at the P/S ratio that just because a company is generating revenues, this does not mean that the company is profitable, and in the long run, profits drive stock prices.
CNH Global NV (NYSE:CNH) has moved up 3.1% and is currently trading at $39.30 per share. The company is currently trading a volume of 312,780 shares. Volume is used to evaluate how meaningful the price movement of a stock 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 debt ratio measures the leverage of a company, and a company's leverage is a good way to assess risk. The debt ratio for CNH is 76.2%, which is relatively high. This means that most of the company's assets are financed through debt. 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.
Chart Industries (Nasdaq:GTLS) is currently trading at a share price of $62.87, a 3.1% decline. So far today, the company's volume is 178,500 shares, in keeping with its current daily average. Volume indicates the level of interest that investors have in a company at its current price. 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). Compared to the industry average of 28.9, GTLS' P/E ratio of 38.4 is quite high. 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. High P/E stocks could be "growth" stocks, while low PE stocks may be "value" stocks. SEE: How To Find P/E And PEG Ratios
Timken (NYSE:TKR) has increased to a share price of $37.31, a 3.1% rise. The company's volume is currently 6.1 million shares. This is greater than yesterday's volume of 2.9 million shares. 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. The debt-equity (D/E) ratio compares the total liabilities for a company to its total shareholder equity. TKR has a low debt-equity ratio of 21%. A low D/E ratio may be a sign that the company is not taking advantage of leverage to increase its profits. 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.
Trinity Industries (NYSE:TRN) is currently trading at $28.76 per share, a 2.7% increase. At 4.8 million shares, the company's volume so far today is 4.5 times its average over the past three months. A stock's volume conveys how excited investors are about it. Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. 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. TRN's capitalization ratio of 60% is relatively high. A high capitalization ratio is not necessarily bad since higher financial leverage can increase the return on a shareholder's investment. Prudent use of leverage (debt) increases the financial resources available to a company for growth and expansion.
The Bottom Line The nature of the market is such that stocks will have good days and bad days. 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.
The Capital Goods sector (XLI) is down 0.1% on a good day for the market overall. The biggest movers in the sector so far are:
| Company | Market Cap | Percentage Change |
| Beacon Roofing Supply, Inc. (Nasdaq:BECN) | $1.24 billion | -7.4% |
| Elbit Systems Ltd. (ADR) (Nasdaq:ESLT) | $1.37 billion | +4.3% |
| Titan Machinery Inc. (Nasdaq:TITN) | $595.8 million | -4.1% |
| CNH Global NV (ADR) (NYSE:CNH) | $9.14 billion | +3.1% |
| Chart Industries, Inc. (Nasdaq:GTLS) | $1.94 billion | -3.1% |
| The Timken Company (NYSE:TKR) | $3.53 billion | +3.1% |
| Trinity Industries, Inc. (NYSE:TRN) | $2.21 billion | +2.7% |
Beacon Roofing Supply (Nasdaq:BECN) is trading at $24.56 per share, down 7.4%. The company's volume is currently 393,969 shares for the day, 0.7 times the average daily volume. If a stock price moves on high volume, this means that the change is a significant one. 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 provides a way of evaluating whether a stock is relatively cheap or expensive. BECN's P/B ratio of 1.98 shows that its share price is higher than its book value. This high share price relative to asset value is likely to indicate that the company has been earning a very high return on its assets. To put things in perspective, should be made among companies in the same industry rather than across industries. SEE: Using The Price-To-Book Ratio To Evaluate Companies
Rising 4.3%, Elbit Systems Ltd (Nasdaq:ESLT) is currently trading at $33.74 per share. The company's volume for the day so far is 1,600 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 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. Dividend yield measures the income that a stock will generate for an investor. Dividend yield for ESLT is 3.7%. Just as with the yield on a bond or certificate of deposit, the higher the dividend yield, the higher the return to the investor. SEE: Guide To Stock-Picking Strategies: Income Investing
Titan Machinery (Nasdaq:TITN) is down 4.1% to reach $27.26 per share. So far today, the company's volume is 148,838 shares, consistent with its average over the last three months. In technical analysis, trading volume is used to determine the strength of a market indicator. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. 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. TITN has a P/S ratio of 0.42, on the low end. Highly levered companies are likely to have lower P/S ratios because the price aspect of this ratio only measures stock market valuation while sales is a function of both stock market and bond market capitalization. It is important to keep in mind when looking at the P/S ratio that just because a company is generating revenues, this does not mean that the company is profitable, and in the long run, profits drive stock prices.
Chart Industries (Nasdaq:GTLS) is currently trading at a share price of $62.87, a 3.1% decline. So far today, the company's volume is 178,500 shares, in keeping with its current daily average. Volume indicates the level of interest that investors have in a company at its current price. 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). Compared to the industry average of 28.9, GTLS' P/E ratio of 38.4 is quite high. 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. High P/E stocks could be "growth" stocks, while low PE stocks may be "value" stocks. SEE: How To Find P/E And PEG Ratios
Timken (NYSE:TKR) has increased to a share price of $37.31, a 3.1% rise. The company's volume is currently 6.1 million shares. This is greater than yesterday's volume of 2.9 million shares. 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. The debt-equity (D/E) ratio compares the total liabilities for a company to its total shareholder equity. TKR has a low debt-equity ratio of 21%. A low D/E ratio may be a sign that the company is not taking advantage of leverage to increase its profits. 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.
Trinity Industries (NYSE:TRN) is currently trading at $28.76 per share, a 2.7% increase. At 4.8 million shares, the company's volume so far today is 4.5 times its average over the past three months. A stock's volume conveys how excited investors are about it. Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. 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. TRN's capitalization ratio of 60% is relatively high. A high capitalization ratio is not necessarily bad since higher financial leverage can increase the return on a shareholder's investment. Prudent use of leverage (debt) increases the financial resources available to a company for growth and expansion.
The Bottom Line The nature of the market is such that stocks will have good days and bad days. 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.
by
Investopedia Staff
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