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Tickers in this Article: TSLA, HOG, VRA, OXM, WBC, WRC, ALSN
So far today, the Nasdaq has moved up 0.2%, the S&P 500 has increased 0.1% and the Dow has fallen 0.1%. The consumer cyclical sector is a category of stocks that relies heavily on the business cycle and economic conditions. Consumer cyclicals include industries such as automotive, housing, entertainment and retail. The category can be further divided into durable and non-durable sections. Durable cyclicals include physical goods such as hardware or vehicles, while non-durables represent items like movies or hotel services. The performance of consumer cyclicals is highly related to the state of the economy. They represent goods and services that are not considered necessities, but luxurious purchases. During contractions or recessions, people have less disposable income to spend on consumer cyclicals. When the economy is expanding or booming, the sales of these goods rise as retail and leisure spending increase.

The Consumer Cyclical sector (XLY) has risen 0.6% overall, and these are the biggest movers in the sector so far:
CompanyMarket CapPercentage Change
Tesla Motors Inc (Nasdaq:TSLA).48 billion-4.3%
Harley-Davidson (NYSE:HOG).09 billion-3.7%
Vera Bradley, Inc. (Nasdaq:VRA)9.5 million-3.5%
Oxford Industries, Inc. (NYSE:OXM)2.8 million-2.7%
WABCO Holdings Inc. (NYSE:WBC).18 billion-2.6%
Warnaco Group Inc (NYSE:WRC).77 billion-2.1%
Allison Transmission Holdings Inc (NYSE:ALSN).99 billion+1.9%
Forex Broker Summary: Forex Capital Markets (FXCM)

Slipping 4.3%, Tesla Motors (Nasdaq:TSLA) is currently trading at $31.69 per share. The company's volume is currently 1.4 million shares for the day, consistent with its average 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. There are many tools investors can use to evaluate a stock, including margins. Margins, quite simply, are earnings expressed as a ratio, or a percentage of sales, and this allows investors to compare the profitability of different companies, while net earnings, which are presented as an absolute number, cannot. TSLA's gross profit margin is 38.5%. Investors trying to assess a company's ability to continue to pay its fixed expenses even if its business declines may want to evaluate the operating margin ratio. TSLA has a negative operating margin of -294.2%. This shows that the company reported a net operating loss in the most recent quarter.

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/book value ratio is calculated by dividing the current stock price by the company's book value per share. TSLA's P/B ratio of 21.71 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. All else being equal, a stock with a low P/B value ratio is more attractive than a stock with a high ratio. SEE: How Buybacks Warps The Price-To-Book Ratio

Harley-Davidson (NYSE:HOG) has fallen 3.7% and is currently trading at $46.17 per share. The company's volume for the day so far is 2.5 million shares. This is more trading activity than there was yesterday. Volume indicates the level of interest that investors have in a company at its current price. Margin analysis is a great way to understand the profitability of companies. HOG has a gross profit margin of 40.1%. Value investors, investors in distressed securities, and junk bond investors will probably pay more attention to the operating margin ratio. HOG's operating profit margin of 16.3% is low relative to its gross profit margin. Net profit margin compares net income with sales. The company has a net profit margin of 12.2%.

Understanding investment valuation ratios allows the investor to assess the true value of an individual stock. Dividend yield measures the income that a stock will generate for an investor. HOG's dividend yield of 1.3% is fairly low. A company with a low dividend yield may be a safer investment in the long run. 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: Dividend Yield For The Downturn

Vera Bradley (Nasdaq:VRA) has decreased to $21.65 per share, a 3.5% fall. At 207,079 shares, the company's volume so far today is 0.3 times the average daily volume. Volume is used to evaluate how meaningful the price movement of a stock is. Margin analysis tells us how effectively management can wring profits from sales and how much room a company has to withstand a downturn, fend off competition and make mistakes. VRA's gross profit margin is 57.9%. The operating margin ratio is calculated by dividing operating income by sales and provides a measure of what percentage of a company's revenues is available to pay its fixed costs. VRA has an operating profit margin of 17.8%. Tracking net profit margin over time for a single company can be a valuable tool for seeing how a business is developing. Net profit margin for the company is 12.4%.

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 price/sales ratio measures a company's stock market price by its revenues. The P/S ratio for VRA is a high 2.21. In young companies, a high P/S ratio is a sign of sales growth that is expected to turn into earnings and cash flow. 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.

Oxford Industries (NYSE:OXM) is down 2.7% to reach $43.10 per share. So far today, 43,572 shares have changed hands. If a stock price makes a big move up or down, volume lets us know the significance of that move. Profit-margin ratios measure how much money a company squeezes from its total revenue or total sales. Investors can look at a company's gross profit margin, operating profit margin and net margin to understand a company's profitability. OXM has a gross profit margin of 58.1%. Net profit margin comes as close as possible to summing-up in a single figure how effectively managers run the business. The company has a net profit margin of 3.7%, high compared to its gross profit margin. Companies with high net profit margins have a bigger cushion to protect themselves during the hard times. The operating margin ratio can also be useful for tracking an individual company's performance across time, where an increasing ratio is good and a declining ratio may provide cause for concern that a company's business model is weakening. Operating profit margin for OXM is 14.2%.

Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. The debt ratio is calculated by dividing total liabilities by total assets. OXM's debt ratio is 56.9%. 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.

WABCO Holdings (NYSE:WBC) is currently trading at a share price of $48.01, a 2.6% decline. So far today, the company's volume is 274,266 shares, 0.4 times its average over the past three months. 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. Calculating the profit margin is a great way to gain insight into aspects of how well a company generates and retains money. Instead of measuring how much managers earn from assets, equity or invested capital, profit-margin ratios measure how far a company stretches its total revenue or total sales. WBC's gross profit margin is 31.9%. Compared with its gross profit margin, WBC's operating profit margin of 13.6% and net profit margin of 12% are low.

Valuation ratios allow the investor to make a quick determination as to a company's investment value. To a large degree, the debt-equity (D/E) ratio provides another vantage point on a company's leverage position, in this case, comparing total liabilities to shareholders' equity, as opposed to total assets in the debt ratio. WBC has a debt-equity ratio of 20%, which is on the low side. Companies with low D/E ratios are more attractive to investors because they are better able to protect their business interests in times of decline. 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.

Warnaco Group (NYSE:WRC) is trading at $42.20 per share, down 2.1%. The company is trading at a volume of 133,188 shares. Trading activity is down from yesterday when 1.2 million shares changed hands. In technical analysis, trading volume is used to determine the strength of a market indicator. There are many tools investors can use to evaluate a stock, including margins. Margins, quite simply, are earnings expressed as a ratio, or a percentage of sales, and this allows investors to compare the profitability of different companies, while net earnings, which are presented as an absolute number, cannot. WRC has a gross profit margin of 45.6%. Operating margin is determined by taking operating income (income minus variable expenses) and dividing it by sales. WRC has an operating profit margin of 8.5%. While ratios such as price/earnings (P/E) or price/book value look at the relative attractiveness of a stock, the net profit margin ratio focuses on company performance rather that stock market valuation. Net margin is 4.8%.

Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. Perhaps one of the most widely-used stock analysis tools is the price-to-earnings ratio, or P/E. The P/E ratio for WRC is 15.7, above the industry average of 14.39. Generally speaking, the higher the P/E ratio, the higher the market expectations for a company's future performance. From the investor's perspective, a stock with a lower ratio is relatively cheaper than a stock with a higher ratio. SEE: Can Investors Trust the P/E Ratio?

Allison Transmission Holdings (NYSE:ALSN) is currently trading at $16.81 per share, a 1.9% increase. So far today, the company's volume is 205,315 shares, 0.3 times the average daily volume. High volume indicates a lot of investor interest while low volume indicates the opposite. There are many tools investors can use to evaluate a stock, including margins. Margins, quite simply, are earnings expressed as a ratio, or a percentage of sales, and this allows investors to compare the profitability of different companies, while net earnings, which are presented as an absolute number, cannot. The gross profit margin for ALSN is 56.7%. Net profit margin examines how effectively a company is managed and how profitable it is by looking at how much of each dollar in revenues ultimately hits the company's bottom line. With a net profit margin of 5.5%, the company has a high one compared to its gross profit margin. A high net profit margin means a company is able to control its costs that buy goods and services at prices significantly higher than it costs to produce or provide them. Operating margin provides a measure of a company's ability to pay its fixed costs such as interest on debt, particular if its business were to decline in the future. ALSN's operating profit margin is 25.7%.

Investment valuation ratios can be very useful in estimating whether a stock price is too high, reasonable or a bargain investment opportunity. The capitalization ratio is calculated by dividing long-term debt by the sum of long-term debt and shareholders' equity. ALSN has a high capitalization ratio of 78.1%. A high capitalization ratio is not necessarily bad since higher financial leverage can increase the return on a shareholder's investment. 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.

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. Tools like valuation ratios and profit margins, however, are only as useful as the context you put them in; remember to take historical data and competitor performance into account.

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