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Tickers in this Article: TITN, B, ESLT, CFX, MLM, VMC, SODA
Currently, the Nasdaq has decreased 0.6%, the S&P 500 remains relatively unchanged and the Dow has increased 0.1%. 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) has moved up 0.1% so far today and here are its biggest movers:
CompanyMarket CapPercentage Change
Titan Machinery (Nasdaq:TITN)$531.3 million-20.9%
Barnes Group (NYSE:B)$1.33 billion-13.2%
Elbit Systems Ltd (Nasdaq:ESLT)$1.33 billion+4.9%
Colfax (NYSE:CFX)$3.29 billion-4.4%
Martin Marietta Materials (NYSE:MLM)$3.72 billion+4.2%
Vulcan Materials (NYSE:VMC)$5.22 billion+3.1%
Sodastream (Nasdaq:SODA)$758 million+2.6%
Broker Summary: Charles Schwab Online Brokerage

After a precipitous drop of 20.9%, Titan Machinery (Nasdaq:TITN) is now trading at a share price of $20.06. At 3.8 million shares, the company's volume so far today is 6.4 times the average daily volume. Volume is used to evaluate how meaningful the price movement of a stock is. 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). TITN's P/E ratio of 11.9 is consistent with the industry average. 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

Taking a 13.2% hit, Barnes Group (NYSE:B) is currently trading at $24.72 per share. The company is trading at a volume of 23,199 shares. This is more trading activity than there was yesterday. 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. Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. 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. B's capitalization ratio is 34.1%. A low level of debt and a healthy proportion of equity in a company's capital structure is an indication of financial fitness.

Rising 4.9%, Elbit Systems Ltd (Nasdaq:ESLT) is currently trading at $32.51 per share. The company's volume is currently 7,151 shares for the day, 0.6 times the current three-month average. Price change alone is not enough to know how a stock is doing. Volume is an important secondary indicator used to confirm trends suggested by price movement. 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 price/book value ratio is especially important for value investors as it can provide an indication of the true value of a company's assets at a time when its business model may be failing. ESLT has a P/B ratio of 1.49 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. P/B has its shortcomings but is still widely used as a valuation metric, more relevant for use by investors looking at capital-intensive or finance-related businesses, such as banks; book value does not carry much meaning for service-based firms with few tangible assets. SEE: Using The Price-To-Book Ratio To Evaluate Companies

Currently trading at $33.51 per share, Colfax (NYSE:CFX) has fallen 4.4%. The company is currently trading a volume of 752,951 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. 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 price/sales ratio measures a company's stock market price by its revenues. CFX's P/S ratio of 1.14 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.

Martin Marietta Materials (NYSE:MLM) is at $84.57 per share after an increase of 4.2%. So far today, the company's volume is 695,615 shares, 1.8 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. 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. MLM's debt ratio is 56.1%. 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.

After rising 3.1%, Vulcan Materials (NYSE:VMC) is currently trading at a share price of $41.62. The company's volume for the day so far is 457,132 shares. If a stock price moves on high volume, this means that the change is a significant one. Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. The debt-equity (D/E) ratio is a leverage ratio. VMC's D/E ratio is 75%. 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.

Sodastream (Nasdaq:SODA) has increased to a share price of $38.60, a 2.6% rise. So far today, the company's volume is 276,459 shares, in keeping with the average volume over the past three months. In technical analysis, trading volume is used to determine the strength of a market indicator. 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 price/earnings to growth (PEG) ratio can reveal value what price/earnings (P/E) ratios alone may not so that if a company has a high P/E ratio (an indication that its stock is overpriced) but its earnings are growing very quickly, the PEG ratio may reveal that the company is actually fairly valued, or perhaps even a bargain. PEG ratio for SODA is consistent with the industry average at 0.65. 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.

The Bottom Line The nature of the market is such that stocks will have good days and bad days. It is important to weigh current activity against historical performance when making any investment decisions. 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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