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Tickers in this Article: UAL, UPS, WAB, GWR, GLF, FDX, ODFL
The market is currently down, with the Nasdaq falling 0.2%, the S&P 500 slipping 0.5% and the Dow declining 0.6%. 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 1.1%, underperforming the market overall. The current biggest movers in the sector are:
CompanyMarket CapPercentage Change
United Continental Holdings Inc (NYSE:UAL)$7.16 billion-4.5%
United Parcel Service (NYSE:UPS)$74.79 billion-4.5%
Westinghouse Air Brake Technologies Corp (NYSE:WAB)$3.64 billion+4.2%
Genesee & Wyoming Inc. (NYSE:GWR)$3.11 billion+3.9%
GulfMark Offshore, Inc. (NYSE:GLF)$960 million-3.3%
FedEx (NYSE:FDX)$28.26 billion-2.5%
Old Dominion Freight Line (Nasdaq:ODFL)$2.34 billion-2.4%
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Slipping 4.5%, United Continental Holdings (NYSE:UAL) is currently trading at $20.57 per share. With 2.6 million shares changing hands so far today, the company's volume is 0.6 times the current three-month average. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. 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. UAL's capitalization ratio of 88.2% is relatively high. If the company is a company is in a highly competitive business and hobbled by high debt, it will find its competitors taking advantage of its problems to grab more market share. A low level of debt and a healthy proportion of equity in a company's capital structure is an indication of financial fitness.

UPS (NYSE:UPS) is currently trading at a share price of $74.42, a 4.5% decline. The company is trading at a volume of 5.4 million shares. Yesterday's volume was only 4.2 million 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. Investment valuation ratios can be very useful in estimating whether a stock price is too high, reasonable or a bargain investment opportunity. The price/earnings to growth (PEG) ratio divides a company's P/E ratio by its growth rate of earnings-per-share. PEG ratio for UPS is consistent with the industry average at 1.58. While P/E ratios are important indicators of market value, a high P/E in and of itself is not bad because it may indicate a company whose earnings are growing very rapidly, so many investors look at the PEG ratio in order to get an idea of whether or not a particular P/E ratio is justified by underlying earnings growth.

After an increase of 4.2%, Westinghouse Air Brake (NYSE:WAB) has reached a current price of $78.70. At 265,941 shares, the company's volume so far today is 1.1 times its current daily average. A stock's volume conveys how excited investors are about it. In making a decision about a potential or existing investment, valuation ratios are useful as a basis for seeing whether the stock price is too high, reasonable, or a bargain. The price/book value ratio is calculated by dividing the current stock price by the company's book value per share. The P/B ratio for WAB is 3.38, indicating that the stock is trading for more 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: Investment Valuation Ratios: Price/Book Value Ratio

Genesee & Wyoming (NYSE:GWR) is up 3.9% to reach a current price of $58.53 per share. The company's volume for the day so far is 334,221 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. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. 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. GWR's P/S ratio of 2.76 is on the high side. This could be a good sign if the share price increases. 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 3.3%, GulfMark Offshore (NYSE:GLF) is currently at a share price of $34.59. The company's volume is currently 216,174 shares for the day, 1.2 times its current three-month average. 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 debt ratio is calculated by dividing total liabilities by total assets. The debt ratio for GLF is a low 37.9%. 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.

FedEx (NYSE:FDX) is down 2.5% to reach $87.01 per share. The company's volume for the day so far is 1.5 million shares. This is more trading activity than there was yesterday. The trading volume for a stock indicates the level of investor interest. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. 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. FDX's debt-equity ratio of 11% is on the low end. 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.

Old Dominion Freight (Nasdaq:ODFL) has decreased to $39.72 per share, a 2.4% fall. At 90,808 shares, the company's volume so far today is 0.2 times the average daily volume. 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. 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. One of the most important estimates of stock market valuation is the price/earnings ratio (P/E ratio). ODFL's P/E ratio of 15.9 is under the industry average of 21.02. A low P/E ratio may indicate that the market expects relatively slower earnings growth. High P/E stocks could be "growth" stocks, while low PE stocks may be "value" stocks. SEE: How To Find P/E And PEG Ratios

The Bottom Line The nature of the market is such that stocks will have good days and bad days. 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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