Filed Under: ,
Tickers in this Article: CEA, KEX, ZNH, GSH, SAVE, GLF, KSU
The market is having a bad day so far: the Nasdaq has fallen 0.2%; the S&P 500 is trading down 0.1%; and the Dow has declined 0.1%. 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 down 0.3%, underperforming the market overall. The current biggest movers in the sector are:
CompanyMarket CapPercentage Change
China Eastern Airlines Corp. Ltd. (ADR) (NYSE:CEA)$4.03 billion-3.1%
Kirby Corporation (NYSE:KEX)$3.06 billion-2.6%
China Southern Airlines Limited (ADR) (NYSE:ZNH)$4.99 billion-2.4%
Guangshen Railway Co. Ltd (ADR) (NYSE:GSH)$2.19 billion+1.7%
Spirit Airlines Incorporated (Nasdaq:SAVE)$1.4 billion+1.7%
GulfMark Offshore, Inc. (NYSE:GLF)$1.04 billion-1.6%
Kansas City Southern (NYSE:KSU)$8.21 billion-1.5%
Beginner's Guide To FXCM And Trading Station

Currently trading at $17.30 per share, China Eastern Airlines Corp. Ltd (NYSE:CEA) has fallen 3.1%. The company's volume is currently 9,758 shares for the day, lighter than yesterday's volume of 35,831 shares. 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 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. 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. The D/E ratio for CEA is 186%. 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.

Kirby (NYSE:KEX) is currently trading at a share price of $53.36, a 2.6% decline. So far today, the company's volume is 119,419 shares. This is 0.2 times the current daily average. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. 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/earnings ratio is calculated by taking a stock price and dividing it by the earnings-per-share (EPS). The P/E ratio for KEX is 14.8, above the industry average of 5.33. 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. A high P/E ratio indicates a stock that is expensive, while a low P/E ratio indicates a stock that is cheap. SEE: Investment Valuation Ratios: Price/Earnings Ratio

China Southern Airlines Limited (NYSE:ZNH) is down 2.4% to reach $24.79 per share. The company's volume for the day so far is 1,489 shares, 0.1 times its average over the past three months. A stock's volume conveys how excited investors are about it. Valuation ratios allow the investor to make a quick determination as to a company's investment value. 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. ZNH's P/B ratio of 0.95 indicates that its share price is lower than its book value. This could mean that either the market believes the asset value is overstated, or the company is earning a very poor (even negative) return on its assets. 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: Investment Valuation Ratios: Price/Book Value Ratio

Guangshen Railway Co. Ltd (NYSE:GSH) is up 1.7% to reach a current price of $15.73 per share. The company's volume for the day so far is 7,197 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. Understanding investment valuation ratios allows an investor to assess the true value of an individual stock. 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. Dividend yield for GSH is 4.5%. A stock's dividend yield depends on the nature of a company's business, its posture in the marketplace (value or growth oriented), its earnings and cash flow, and its dividend policy. SEE: Guide To Stock-Picking Strategies: Income Investing

Spirit Airlines (Nasdaq:SAVE) has moved up 1.7% and is currently trading at $21.04 per share. So far today, the company's volume is 179,845 shares, which is likely to result in less activity than yesterday's volume of 839,866 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. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. A price/sales ratio is derived by dividing stock market price by company sales. SAVE's P/S ratio of 1.17 is on the high side. This could be a good sign if the share price increases. All things being equal, a low P/S ratio is good news for investors, while a very high one can be a warning sign.

After a decline of 1.6%, GulfMark Offshore (NYSE:GLF) has hit a share price of $37.84. This morning, the company's volume is 45,646 shares. This is 0.2 times its average daily volume. If a stock price makes a big move up or down, volume lets us know the significance of that move. 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 ratio is calculated by dividing total liabilities by total assets. The debt ratio for GLF is a low 34.8%. A low debt ratio means the company has more available cash flow. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.

Kansas City (NYSE:KSU) is trading at $73.53 per share, down 1.5%. With 239,136 shares changing hands so far today, the company's volume is 0.2 times the average volume over the last three months. 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. 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 debt-equity (D/E) ratio compares the total liabilities for a company to its total shareholder equity. KSU has a D/E ratio of 55%. The D/E ratio percentage provides a much more dramatic perspective on a company's leverage position than the debt ratio percentage.

The Bottom Line No matter the economic climate, Wall Street will always have stocks that make major moves each week. Daily stock performance should be weighed against historical performance and put in context of the market overall. However, these fundamental metrics must be analyzed with historic data, industry information in addition to firm specific financial statements.

comments powered by Disqus

Trading Center