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Capital Goods Stocks, Including Boeing, Making Big Moves on August 23, 2012
The market is having a bad day so far. The Nasdaq has slipped 0.2%; the S&P 500 is trading down 0.4%; and the Dow is down 0.6%. The capital goods sector is the category of stocks related to the manufacture or distribution of goods. The sector is diverse, containing companies that manufacture machinery used to create capital goods, electrical equipment, aerospace and defense, engineering and construction projects. It is also referred to as the "industrials sector". Performance in the capital goods sector is sensitive to fluctuations in the business cycle. Because it relies heavily on manufacturing, the sector does well when the economy is booming or expanding. As economic conditions worsen, the demand for capital goods drops off, usually lowering the prices of stocks in the sector.
The Capital Goods sector (XLI) is currently lagging behind the overall market, down 0.5%, and its current biggest movers are:
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After a big jump of 11%, HEICO (NYSE:HEI) is trading at $38.63 per share. The company's volume is currently 546,315 shares for the day, 2.4 times the average daily volume. High volume indicates a lot of investor interest while low volume indicates the opposite. 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 easy-to-calculate debt ratio is helpful to investors looking for a quick take on the leverage for a company. HEI has a low debt ratio of 42.6%. A low debt ratio means the company has more available cash flow. 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.
HEICO (NYSE:HEI.A) has risen 9% and is currently trading at $31.86 per share. So far today, 37,970 shares have changed hands. In technical analysis, trading volume is used to determine the strength of a market indicator. Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. For investors primarily interested in the income a stock can generate, the dividend yield is an important determinant of how attractive a stock is. HEI.A has a low dividend yield of 0.4%. A company with a low dividend yield may be a safer investment in the long run. Just as with the yield on a bond or certificate of deposit, the higher the dividend yield, the higher the return to the investor. SEE: Dividend Yield For The Downturn
Eagle Materials (NYSE:EXP) has increased to a share price of $43.48, a 5.2% rise. This morning, 646,647 shares have been traded,. If a stock price makes a big move up or down, volume lets us know the significance of that move. 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. The debt-equity (D/E) ratio is a leverage ratio. EXP has a D/E ratio of 52%. The D/E ratio is not a pure measurement of a company's debt because it includes operational liabilities in total liabilities.
BE Aerospace (Nasdaq:BEAV) has fallen 3% and is currently trading at $38.81 per share. So far today, the company's volume is 829,939 shares. This is 0.8 times the current three-month average. 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. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. The debt ratio is calculated by dividing total liabilities by total assets. BEAV's debt ratio is 56.2%. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.
Foster (Nasdaq:FWLT) has moved up 2.6% and is currently trading at $21.01 per share. So far today, the company's volume is 1.4 million shares, 0.9 times its current daily average. 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. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. The price/sales ratio is used for spotting recovery situations or for double-checking that a company's growth has not become overvalued. The P/S ratio for FWLT is 0.45, which is relatively low. Coupled with high relative strength in the previous twelve months, a low P/S ratio is one of the most potent combinations of investment criteria. All things being equal, a low P/S ratio is good news for investors, while a very high one can be a warning sign.
Currently trading at $71 per share, Boeing (NYSE:BA) has fallen 2.5%. This morning, the company is trading a volume of 3.4 million shares. Volume is an important indicator because it indicates how significant a price 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. 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. BA's capitalization ratio of 60.1% 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. This ratio is considered to be one of the more meaningful of the "debt" ratios - it delivers the key insight into the use of leverage by a company.
Falling 2.3%, Triumph Group (NYSE:TGI) is currently at a share price of $60.59. So far today, the company's volume is 162,181 shares,. When a stock price moves up or down, watching the volume is a good way of identifying how significant that shift is. 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. A company's price/earnings ratio (P/E ratio) provides a measure of how expensive or cheap a stock is. Relative to the industry P/E ratio of 14.67, TGI's 10.7 is low. A low P/E ratio may indicate that the market expects relatively slower earnings growth. 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
The Bottom Line On any given day, a particular stock may see positive or negative change in its share price. It is important to weigh current activity against historical performance when making any investment decisions. Keep in mind that all these ratios should be compared against historical numbers and industry information in order to get a more complete picture.
The Capital Goods sector (XLI) is currently lagging behind the overall market, down 0.5%, and its current biggest movers are:
| Company | Market Cap | Percentage Change |
| HEICO (NYSE:HEI) | $1.83 billion | +11% |
| HEICO (NYSE:HEI.A) | $732.3 million | +9% |
| Eagle Materials (NYSE:EXP) | $1.88 billion | +5.2% |
| BE Aerospace (Nasdaq:BEAV) | $4.16 billion | -3% |
| Foster (Nasdaq:FWLT) | $2.21 billion | +2.6% |
| Boeing (NYSE:BA) | $54.73 billion | -2.5% |
| Triumph Group (NYSE:TGI) | $3.1 billion | -2.3% |
After a big jump of 11%, HEICO (NYSE:HEI) is trading at $38.63 per share. The company's volume is currently 546,315 shares for the day, 2.4 times the average daily volume. High volume indicates a lot of investor interest while low volume indicates the opposite. 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 easy-to-calculate debt ratio is helpful to investors looking for a quick take on the leverage for a company. HEI has a low debt ratio of 42.6%. A low debt ratio means the company has more available cash flow. 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.
HEICO (NYSE:HEI.A) has risen 9% and is currently trading at $31.86 per share. So far today, 37,970 shares have changed hands. In technical analysis, trading volume is used to determine the strength of a market indicator. Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. For investors primarily interested in the income a stock can generate, the dividend yield is an important determinant of how attractive a stock is. HEI.A has a low dividend yield of 0.4%. A company with a low dividend yield may be a safer investment in the long run. Just as with the yield on a bond or certificate of deposit, the higher the dividend yield, the higher the return to the investor. SEE: Dividend Yield For The Downturn
Eagle Materials (NYSE:EXP) has increased to a share price of $43.48, a 5.2% rise. This morning, 646,647 shares have been traded,. If a stock price makes a big move up or down, volume lets us know the significance of that move. 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. The debt-equity (D/E) ratio is a leverage ratio. EXP has a D/E ratio of 52%. The D/E ratio is not a pure measurement of a company's debt because it includes operational liabilities in total liabilities.
Foster (Nasdaq:FWLT) has moved up 2.6% and is currently trading at $21.01 per share. So far today, the company's volume is 1.4 million shares, 0.9 times its current daily average. 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. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. The price/sales ratio is used for spotting recovery situations or for double-checking that a company's growth has not become overvalued. The P/S ratio for FWLT is 0.45, which is relatively low. Coupled with high relative strength in the previous twelve months, a low P/S ratio is one of the most potent combinations of investment criteria. All things being equal, a low P/S ratio is good news for investors, while a very high one can be a warning sign.
Currently trading at $71 per share, Boeing (NYSE:BA) has fallen 2.5%. This morning, the company is trading a volume of 3.4 million shares. Volume is an important indicator because it indicates how significant a price 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. 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. BA's capitalization ratio of 60.1% 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. This ratio is considered to be one of the more meaningful of the "debt" ratios - it delivers the key insight into the use of leverage by a company.
Falling 2.3%, Triumph Group (NYSE:TGI) is currently at a share price of $60.59. So far today, the company's volume is 162,181 shares,. When a stock price moves up or down, watching the volume is a good way of identifying how significant that shift is. 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. A company's price/earnings ratio (P/E ratio) provides a measure of how expensive or cheap a stock is. Relative to the industry P/E ratio of 14.67, TGI's 10.7 is low. A low P/E ratio may indicate that the market expects relatively slower earnings growth. 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
The Bottom Line On any given day, a particular stock may see positive or negative change in its share price. It is important to weigh current activity against historical performance when making any investment decisions. Keep in mind that all these ratios should be compared against historical numbers and industry information in order to get a more complete picture.
by
Investopedia Staff
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