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Canadian Pacific Railway Limited and Other Transportation Stocks Making Big Moves on October 5, 2012
The market has been doing well after the morning's trading. The Nasdaq has increased 0.2%; the S&P 500 is trading up 0.5%; and the Dow is up 0.5%. 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.
Outperforming the market overall, the Transportation sector (IYT) is up 1.2% and its biggest movers so far today are:
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After an increase of 1.9%, Canadian Pacific Railway Limited (NYSE:CP) has reached a current price of $88.97. The company's volume is currently 205,021 shares for the day, consistent with the volume from yesterday which is likely to result in less activity than yesterday's volume of 493,132 shares. When a stock price moves up or down, watching the volume is a good way of identifying how significant that shift is. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. 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. CP's capitalization ratio is 49%. A low level of debt and a healthy proportion of equity in a company's capital structure is an indication of financial fitness.
CH Robinson (Nasdaq:CHRW) has increased to a share price of $60.95, a 1.8% rise. The company's volume for the morning is 401,371 shares. This is 0.2 times the average daily volume. A stock's volume conveys how excited investors are about it. Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. 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. CHRW's P/B ratio of 7.7 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. Users need to be careful when applying this ratio though, as it is more useful for industrial companies that have a lot of tangible assets than it is for technology or consumer product companies that may not have much in the way of hard assets. SEE: Investment Valuation Ratios: Price/Book Value Ratio
J.B. Hunt Transport Services (Nasdaq:JBHT) is at $55.17 per share after an increase of 1.7%. With 432,000 shares changing hands so far today, the company's volume is consistent with its average over the last three months. High volume indicates a lot of investor interest while low volume indicates the opposite. Looking at a company's valuation ratios is a good way of getting a basic idea as to its value as an investment. The price/earnings ratio is calculated by taking a stock price and dividing it by the earnings-per-share (EPS). Compared to the industry average of 5.57, JBHT's P/E ratio of 22.4 is quite high. This could mean that the market is expecting big things over the next few months or years. From the investor's perspective, a stock with a lower ratio is relatively cheaper than a stock with a higher ratio. SEE: How To Find P/E And PEG Ratios
After rising 1.4%, Kansas City (NYSE:KSU) is currently trading at a share price of $76.31. The company is currently trading a volume of 214,704 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. Valuation ratios allow the investor to make a quick determination as to a company's investment value. As with most ratios, comparisons of company price/earnings to growth ratios (PEG ratios) are most appropriate for similar companies. KSU's PEG ratio of 1.21 is in line 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.
Nordic American Tanker (NYSE:NAT) is down 1.3% to reach $9.93 per share. So far today, the company's volume is 269,115 shares,. In technical analysis, trading volume is used to determine the strength of a market indicator. 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. NAT's dividend yield of 11.9% is on the high end. This could mean either that the stock is underpriced or that the company has fallen on hard times and future dividends will not be as high as previous ones. Simply comparing the level of dividends that two stocks pay does not give a true reflection of which security is more attractive, so investors calculate the dividend yield in order to standardize dividend payments. SEE: Dividend Yield For The Downturn
Currently trading at $15.13 per share, Ship Finance (NYSE:SFL) has fallen 1.2%. So far today, the company's volume is 329,948 shares. This is 0.3 times the current daily average. Volume indicates the level of interest that investors have in a company at its current price. Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. A price/sales ratio is derived by dividing stock market price by company sales. SFL has a high P/S ratio of 3.72. 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 keep in mind when looking at the P/S ratio that just because a company is generating revenues, this does not mean that the company is profitable, and in the long run, profits drive stock prices.
Copa Holdings (NYSE:CPA) has moved up 1.2% and is currently trading at $85.69 per share. The company's volume is currently 111,764 shares for the day, consistent with its current three-month average. Volume is used to evaluate how meaningful the price movement of a stock is. 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 easy-to-calculate debt ratio is helpful to investors looking for a quick take on the leverage for a company. CPA has a debt ratio of 56.5%. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.
The Bottom Line No matter the economic climate, Wall Street will always have stocks that make major moves each week. It is important to weigh current activity against historical performance when making any investment decisions. However, these fundamental metrics must be analyzed with historic data, industry information in addition to firm specific financial statements.
Outperforming the market overall, the Transportation sector (IYT) is up 1.2% and its biggest movers so far today are:
| Company | Market Cap | Percentage Change |
| Canadian Pacific Railway Limited (NYSE:CP) | $15.08 billion | +1.9% |
| CH Robinson (Nasdaq:CHRW) | $9.67 billion | +1.8% |
| J.B. Hunt Transport Services (Nasdaq:JBHT) | $6.38 billion | +1.7% |
| Kansas City (NYSE:KSU) | $8.28 billion | +1.4% |
| Nordic American Tanker (NYSE:NAT) | $532.3 million | -1.3% |
| Ship Finance (NYSE:SFL) | $1.21 billion | -1.2% |
| Copa Holdings (NYSE:CPA) | $3.75 billion | +1.2% |
After an increase of 1.9%, Canadian Pacific Railway Limited (NYSE:CP) has reached a current price of $88.97. The company's volume is currently 205,021 shares for the day, consistent with the volume from yesterday which is likely to result in less activity than yesterday's volume of 493,132 shares. When a stock price moves up or down, watching the volume is a good way of identifying how significant that shift is. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. 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. CP's capitalization ratio is 49%. A low level of debt and a healthy proportion of equity in a company's capital structure is an indication of financial fitness.
CH Robinson (Nasdaq:CHRW) has increased to a share price of $60.95, a 1.8% rise. The company's volume for the morning is 401,371 shares. This is 0.2 times the average daily volume. A stock's volume conveys how excited investors are about it. Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. 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. CHRW's P/B ratio of 7.7 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. Users need to be careful when applying this ratio though, as it is more useful for industrial companies that have a lot of tangible assets than it is for technology or consumer product companies that may not have much in the way of hard assets. SEE: Investment Valuation Ratios: Price/Book Value Ratio
J.B. Hunt Transport Services (Nasdaq:JBHT) is at $55.17 per share after an increase of 1.7%. With 432,000 shares changing hands so far today, the company's volume is consistent with its average over the last three months. High volume indicates a lot of investor interest while low volume indicates the opposite. Looking at a company's valuation ratios is a good way of getting a basic idea as to its value as an investment. The price/earnings ratio is calculated by taking a stock price and dividing it by the earnings-per-share (EPS). Compared to the industry average of 5.57, JBHT's P/E ratio of 22.4 is quite high. This could mean that the market is expecting big things over the next few months or years. From the investor's perspective, a stock with a lower ratio is relatively cheaper than a stock with a higher ratio. SEE: How To Find P/E And PEG Ratios
Nordic American Tanker (NYSE:NAT) is down 1.3% to reach $9.93 per share. So far today, the company's volume is 269,115 shares,. In technical analysis, trading volume is used to determine the strength of a market indicator. 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. NAT's dividend yield of 11.9% is on the high end. This could mean either that the stock is underpriced or that the company has fallen on hard times and future dividends will not be as high as previous ones. Simply comparing the level of dividends that two stocks pay does not give a true reflection of which security is more attractive, so investors calculate the dividend yield in order to standardize dividend payments. SEE: Dividend Yield For The Downturn
Currently trading at $15.13 per share, Ship Finance (NYSE:SFL) has fallen 1.2%. So far today, the company's volume is 329,948 shares. This is 0.3 times the current daily average. Volume indicates the level of interest that investors have in a company at its current price. Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. A price/sales ratio is derived by dividing stock market price by company sales. SFL has a high P/S ratio of 3.72. 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 keep in mind when looking at the P/S ratio that just because a company is generating revenues, this does not mean that the company is profitable, and in the long run, profits drive stock prices.
Copa Holdings (NYSE:CPA) has moved up 1.2% and is currently trading at $85.69 per share. The company's volume is currently 111,764 shares for the day, consistent with its current three-month average. Volume is used to evaluate how meaningful the price movement of a stock is. 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 easy-to-calculate debt ratio is helpful to investors looking for a quick take on the leverage for a company. CPA has a debt ratio of 56.5%. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.
The Bottom Line No matter the economic climate, Wall Street will always have stocks that make major moves each week. It is important to weigh current activity against historical performance when making any investment decisions. However, these fundamental metrics must be analyzed with historic data, industry information in addition to firm specific financial statements.
by
Investopedia Staff
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