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Tickers in this Article: UFPI, MATW, GGC, CRS, HBM, HAYN, RIO
The market is having a bad day so far: the Nasdaq is trading down 0.7%; the S&P 500 is down 0.7%; and the Dow has slipped 0.8%. The basic materials sector is the category of stocks that accounts for companies involved with the discovery, development and processing of raw materials. This sector includes the mining and refining of metals, chemical producers and forestry products. The basic materials sector is sensitive to changes in the business cycle. Because the sector supplies materials for construction, it depends on a strong economy. This sector is also sensitive to supply and demand fluctuations because the price of raw materials, such as gold or other metals, is largely demand driven.

The Basic Materials sector (XLB) is down 0.6%, outperforming the market overall. Currently, the biggest movers in the sector are:
CompanyMarket CapPercentage Change
Universal Forest Products, Inc. (Nasdaq:UFPI)$797.3 million-15.5%
Matthews International Corp (Nasdaq:MATW)$891.9 million-7.8%
Georgia Gulf Corporation (NYSE:GGC)$1.12 billion+4.9%
Carpenter Technology Corporation (NYSE:CRS)$2.57 billion-4.1%
HudBay Minerals Inc Ord Shs (NYSE:HBM)$1.38 billion+4.1%
Haynes International, Inc. (Nasdaq:HAYN)$645.7 million-3.3%
Rio Tinto plc (ADR) (NYSE:RIO)$91.83 billion-3.2%
Forex Broker Summary: UFXMarkets

Universal Forest Products (Nasdaq:UFPI) is currently trading at $34.19 per share, after a steep drop of 15.5%. With 238,154 shares changing hands so far today, the company's volume is 2.5 times its average over the past three months. Volume is an important indicator because it indicates how significant a price shift is. 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. 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. UFPI has a P/B ratio of 1.15 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. 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

At $29.16, Matthews (Nasdaq:MATW) has slipped 7.8%. The company is trading at a volume of 413,916 shares. Yesterday, volume was only 55,645 shares. High volume indicates a lot of investor interest while low volume indicates the opposite. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. The dividend yield is calculated by dividing a company's dividends per share by its stock price. MATW has a low dividend yield of 1.1%. This could indicate that that the stock is overpriced or that future dividends might be higher. It is important to remember that dividends are only one component of a stock's return and capital appreciation (or decline) must also be considered when evaluating a security. SEE: Guide To Stock-Picking Strategies: Income Investing

After rising 4.9%, Georgia (NYSE:GGC) is currently trading at a share price of $34.27. At 1.4 million shares, the company's volume so far today is 1.2 times the average daily volume. Volume is used to evaluate how meaningful the price movement of a stock is. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. 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. The P/S ratio for GGC is 0.36, which is relatively low. The lower the P/S ratio, the more reasonably price the stock, all else being equal. 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.

Falling 4.1%, Carpenter (NYSE:CRS) is currently at a share price of $47. The company's volume for the day so far is 288,514 shares. A stock's volume conveys how excited investors are about it. Looking at a company's valuation ratios is a good way of getting a basic idea as to its value as an investment. The debt ratio gives users a quick measure of the amount of debt that the company has on its balance sheets compared to its assets. CRS has a debt ratio of 53.2%. 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.

Increasing 4.1%, HudBay Minerals Inc Ord (NYSE:HBM) is trading at $8.37 per share. At 5,826 shares, the company's volume so far today is consistent with its current three-month average. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. 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. HBM's P/B ratio of 0.8 indicates that its share price is lower than its book value. Industries that require more infrastructure capital (for each dollar of profit) will usually trade at P/B ratios much lower than those that don't. 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

Haynes International (Nasdaq:HAYN) is trading at $50.81 per share, down 3.3%. So far today, the company's volume is 25,868 shares. This is on pace to fall short of yesterday's volume of 64,720 shares. The trading volume for a stock indicates the level of investor interest. 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. For investors primarily interested in the income a stock can generate, the dividend yield is an important determinant of how attractive a stock is. HAYN has a dividend yield of 1.7%, which is fairly low. If you are an income investor, this stock may not be attractive to you. For income-oriented investors such as retirees, a stock with a high dividend yield may be more attractive than a stock with a low dividend yield. SEE: Dividend Yield For The Downturn

After a decline of 3.2%, Rio Tinto plc (NYSE:RIO) has hit a share price of $45.26. At 1.1 million shares, the company's volume so far today is 0.4 times its current daily average. Volume indicates the level of interest that investors have in a company at its current price. Valuation ratios allow the investor to make a quick determination as to a company's investment value. In a nutshell, the price/sales ratio shows how much Wall Street values every dollar of the company's sales. RIO has a high P/S ratio of 1.53. This could be a good sign if the share price increases. 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.

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. However, these fundamental metrics must be analyzed with historic data, industry information in addition to firm specific financial statements.

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