So far today, the Nasdaq has fallen 0.5%, the S&P 500 is unchanged and the Dow is down 0.2%. The transportation sector is a category of stocks relating to the transportation of goods or customers. It is made up of airlines, railroads and trucking companies. The performance of the transportation sector is sensitive to the price of oil. Because operations revolve around the use of vehicles, fuel prices represent a significant cost to transportation companies. As the price of oil rises, transportation companies will be expected to earn less. Inversely, these companies do well when the cost of fuel decreases.
The Transportation sector (IYT) has risen 0.1% despite little change in the market overall. Currently, the biggest movers in the sector are:
|Company||Market Cap||Percentage Change|
|Con Way Inc (NYSE:CNW)||$2 billion||-4.8%|
|American Railcar Industries, Inc. (Nasdaq:ARII)||$548.8 million||-4%|
|United Continental Holdings Inc (NYSE:UAL)||$7.92 billion||+3.5%|
|Allegiant Travel Company (Nasdaq:ALGT)||$1.35 billion||+3.3%|
|GulfMark Offshore, Inc. (NYSE:GLF)||$935 million||+3.2%|
|Golar LNG Partners LP (Nasdaq:GMLP)||$743.5 million||-3%|
|Seaspan Corporation (NYSE:SSW)||$1.02 billion||-2.6%|
Forex Broker Summary: Forex Capital Markets (FXCM)
Con Way (NYSE:CNW) is currently trading at a share price of $34.17, a 4.8% decline. This morning, 267,779 shares have been traded, lighter than yesterday's volume of 886,293 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. 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. CNW has a gross profit margin of 61.1%. CNW has an operating profit margin of 4.1% and a net profit margin of 2%, both high compared to its gross profit margin.
It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. The price/earnings ratio is calculated by taking a stock price and dividing it by the earnings-per-share (EPS). The P/E ratio for CNW is 19.1, below the industry average of 26.86. Companies with low P/E ratios may find it easier to surprise the market to the upside, even if their financial performance is not as strong as that of companies with high P/E ratios. 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: How To Find P/E And PEG Ratios
At $24.68, American Railcar Industries (Nasdaq:ARII) has slipped 4%. The company's volume for the day so far is 14,215 shares. This is 0.3 times the average daily volume. The trading volume for a stock indicates the level of investor interest. Margin analysis is a great way to understand the profitability of companies. ARII has a low gross profit margin of 17.2%. Since gross profit margins tend to stay stable, sudden changes may indicate financial fraud, accounting irregularities or problems in the business. Relative to its gross profit margin, ARII's operating profit margin of 13.1% and net profit margin of 3.5% are low.
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 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. ARII's capitalization ratio is 46%. The capitalization ratio is one of the more meaningful debt ratios because it focuses on the relationship of debt liabilities as a component of a company's total capital base, which is the capital raised by shareholders and lenders.
Increasing 3.5%, United Continental Holdings (NYSE:UAL) is trading at $24.69 per share. The company's volume for the day so far is 1.8 million share, 0.5 times its average over the past three months. 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. UAL has a gross profit margin of 34.4%. The operating margin ratio can vary widely across industries, so investors should focus on comparing companies from similar industries or with similar business models. UAL's operating profit margin is 0.7%. Net profit margin compares net income with sales. Net margin is 1.6%.
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. When used consistently and uniformly, the price/earnings to growth (PEG) ratio is an essential tool that adds dimension to the price/earnings ratio, allows comparisons across diverse industries and is always on the lookout for value. UAL has a PEG ratio of 0.69, 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.
Allegiant Travel (Nasdaq:ALGT) has risen 3.3% to hit a current price of $72.78 per share. The company's volume for the day so far is 151,277 shares. Volume is an important indicator because it indicates how significant a price shift is. Profit-margin ratios help us to keep score, as measured over time, of management's ability to generate profits and manage costs and expenses. There are three key profit-margin ratios: gross profit margin, operating profit margin and net profit margin. ALGT's gross profit margin is 38%. A company's operating margin is calculated by dividing operating income by revenues. ALGT's operating profit margin of 15.3% is low relative to its gross profit margin. Net profit margin is a good ratio for determining how a company is performing. Net profit margin for the company is 6.5%.
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. If the price/book value ratio of a stock is high, it may indicate that the stock is expensive, while a lower ratio may indicate that the stock is a bargain. ALGT has a P/B ratio of 3.73 which 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. P/B value comparisons should be made among companies in the same industry rather than across industries. SEE: Investment Valuation Ratios: Price/Book Value Ratio
After an increase of 3.2%, GulfMark Offshore (NYSE:GLF) has reached a current price of $35.97. So far today, 117,271 shares have changed hands, below yesterday's volume of 254,772 shares. If a stock price makes a big move up or down, volume lets us know the significance of that move. Profit-margin ratios can give investors deeper insight into management efficiency than earnings alone can provide. Gross profit margin, operating profit margin and net margin are commonly used margins. GLF has a gross profit margin of 49.7%. Operating profit measures how much cash the business throws off, and some consider it a more reliable measure of profitability since it is harder to manipulate with accounting tricks than net earnings. Operating profit margin for GLF is 7.4%. Comparing net profit margins for companies with similar business models or in similar industries can yield valuable information as to which business is actually performing better. The company's net profit margin is 12.4%.
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. The P/S ratio for GLF is a high 3.17. 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 compare P/S ratios for companies in the same industry, as ratios can vary quite widely for companies in different industries.
Currently trading at $31.20 per share, Golar LNG (Nasdaq:GMLP) has fallen 3%. So far this morning, 2.9 million shares have changed hands. This is 34 times its current daily average. 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. GMLP's gross profit margin of 83.4% is on the high side. Since gross profit margins tend to stay stable, sudden changes may indicate financial fraud, accounting irregularities or problems in the business. The operating profit margin is a rough measure of the operating leverage a company can achieve in the conduct of the operational part of its business. With an operating profit margin of 62.6%, GMLP has a low one relative to its gross profit margin. 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. Net margin is 36.9%.
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 easy-to-calculate debt ratio is helpful to investors looking for a quick take on the leverage for a company. GMLP has a high debt ratio of 96.8%. This means that most of the company's assets are financed through debt. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.
After a decline of 2.6%, Seaspan (NYSE:SSW) has hit a share price of $15.86. At 56,481 shares, the company's volume so far today is 0.4 times the current three-month average. If a stock price moves on high volume, this means that the change is a significant one. Margin ratios highlight companies that are worth further examination. SSW's gross profit margin of 80.2% is fairly high. Investors should track gross profit margin ratios over several years in order to see if earnings are consistent, growing or declining. Net profit margin is a good tool for fundamental analysis and long-term investing but is less useful for technical analysts and short-term traders. The company has a net profit margin of -13.9%. A negative net profit margin means the company spent more money than it made. 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. SSW has an operating profit margin of 48.9%.
Valuation ratios like 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 are useful in determining how attractive a potential or existing investment is. The debt-equity (D/E) ratio is a leverage ratio. The D/E ratio for SSW is 269%. Companies in capital-intensive industries usually have higher D/E ratios because they need to buy more property, plants, and equipment to operate. 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.
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.