The Nasdaq has moved up 1%, the S&P 500 has moved up 0.5% and the Dow has risen 0.6%, marking a bad morning for the market. 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) is relatively unchanged on a good day for the market overall. So far, the biggest movers in the sector are:
|Company||Market Cap||Percentage Change|
|Navios Maritime Partners L.P. (NYSE:NMM)||$911.3 million||-5%|
|Genesee & Wyoming Inc. (NYSE:GWR)||$3.48 billion||+2%|
|GulfMark Offshore, Inc. (NYSE:GLF)||$950.5 million||+2%|
|China Eastern Airlines Corp. Ltd. (ADR) (NYSE:CEA)||$3.95 billion||-2%|
|Swift Transportation Company (NYSE:SWFT)||$1.17 billion||-1.9%|
|Macquarie Infrastructure Company LLC (NYSE:MIC)||$1.83 billion||+1.9%|
|Golar LNG Limited (USA) (Nasdaq:GLNG)||$3.17 billion||+1.8%|
Broker Summary: Charles Schwab Online Brokerage
Slipping 5%, Navios Maritime Partners (NYSE:NMM) is currently trading at $14.40 per share. With 233,608 shares changing hands so far today, the company's volume is in keeping with the average volume over the past three months. When a stock price moves up or down, watching the volume is a good way of identifying how significant that shift 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. The price/book value ratio is one of the more common methods of determining whether a stock is fairly valued. NMM has a P/B ratio of 1.42 which shows that its share price is higher than its book value. This implies that investors expect management to create more value from a given set of assets and/or that the market value of the firm's assets is significantly higher than their accounting value. 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: How Buybacks Warps The Price-To-Book Ratio
Genesee & Wyoming (NYSE:GWR) is up 2% to reach a current price of $64.39 per share. So far today, the company's volume is 180,383 shares. This is 0.3 times its average daily volume. 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. 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. A price/sales ratio is derived by dividing stock market price by company sales. The P/S ratio for GWR is 2.76, which is relatively high. In young companies, a high P/S ratio is a sign of sales growth that is expected to turn into earnings and cash flow. 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.
GulfMark Offshore (NYSE:GLF) has risen 2% to hit a current price of $35.99 per share. The company's volume is currently 43,999 shares for the day, on pace to finish the day below yesterday's volume of 294,889 shares. 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 debt ratio is calculated by dividing total liabilities by total assets. The debt ratio for GLF is a low 34.8%. This indicates that the company engages in conservative financing with opportunities to borrow in the future at no significant risk. 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.
China Eastern Airlines Corp. Ltd (NYSE:CEA) is currently trading at a share price of $17.15, a 2% decline. This morning, the company is trading a volume of 5,874 shares. 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. Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. The debt-equity (D/E) ratio is a measurement of how much suppliers, lenders, creditors and obligors have committed to the company versus what the shareholders have committed. CEA has a high D/E ratio of 186%. This shows that the company's assets are financed primarily through debt. The D/E ratio percentage provides a much more dramatic perspective on a company's leverage position than the debt ratio percentage.
After a decline of 1.9%, Swift Transportation (NYSE:SWFT) has hit a share price of $8.24. The company's volume is currently 426,289 shares for the day, 0.3 times the average volume over the last three months. 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. SWFT has a high capitalization ratio of 91.4%. The company may have trouble meeting operating and debt liabilities on time and surviving adverse economic conditions. A low level of debt and a healthy proportion of equity in a company's capital structure is an indication of financial fitness.
Macquarie Infrastructure (NYSE:MIC) is at $40.06 per share after an increase of 1.9%. So far this morning, 173,244 shares have changed hands. This is 0.6 times its current daily average. High volume indicates a lot of investor interest while low volume indicates the opposite. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. Price/earnings ratios (P/E ratios) provide a measure of the relative value of a stock. MIC has a P/E ratio of 60.5, high compared to the industry average of 13.08. A company with a high P/E ratio will eventually have to live up to the high rating by substantially increasing its earnings, or the price will need to drop. 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
Rising 1.8%, Golar LNG Limited (Nasdaq:GLNG) is currently trading at $40.15 per share. At 183,642 shares, the company's volume so far today is consistent with the volume from yesterday lighter than yesterday's volume of 424,805 shares. In technical analysis, trading volume is used to determine the strength of a market indicator. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. 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. GLNG's stock is trading for more than its book value with a P/B ratio of 4.64. 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 ratios are particularly useful to value investors, distressed or "vulture" investors, or any other investors purchasing beaten-down securities but are less useful to investors focused on growth stocks, purchasing IPOs, or investing in technology or other "asset-lite" companies. SEE: Investment Valuation Ratios: Price/Book Value Ratio
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.