So far today, the Nasdaq is trading up 0.2%, the S&P 500 has moved little and the Dow has been relatively flat. 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 biggest movers in the Transportation sector (IYT) (+0.5%) are:
|Company||Market Cap||Percentage Change|
|Nordic American Tanker Shipping Limited (NYSE:NAT)||$682.6 million||-2.9%|
|Copa Holdings, S.A. (NYSE:CPA)||$3.4 billion||+2.8%|
|Alexander & Baldwin, Inc. (NYSE:ALEX)||$1.3 billion||-2.6%|
|Con Way Inc (NYSE:CNW)||$1.69 billion||+2.3%|
|Seaspan Corporation (NYSE:SSW)||$1.09 billion||-2%|
|Kirby Corporation (NYSE:KEX)||$2.95 billion||+1.8%|
|China Eastern Airlines Corp. Ltd. (ADR) (NYSE:CEA)||$3.92 billion||-1.7%|
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Nordic American Tanker (NYSE:NAT) is trading at $12.53 per share, down 2.9%. At 140,289 shares, the company's volume so far today is 0.1 times the average daily volume. 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. 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. The capitalizion ratio of 21.8% is on the low end. A low capitalization ratio can signify a failure to leverage equity into investment, missing valuable opportunities for growth and expansion. Prudent use of leverage (debt) increases the financial resources available to a company for growth and expansion.
Rising 2.8%, Copa Holdings (NYSE:CPA) is currently trading at $78.85 per share. So far today, 177,673 shares have changed hands. 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. The price/book value ratio provides a way of evaluating whether a stock is relatively cheap or expensive. CPA has a P/B ratio of 2.44 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
Alexander & Baldwin (NYSE:ALEX) has fallen 2.6% and is currently trading at $29.87 per share. So far today, the company's volume is 58,596 shares, 0.3 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 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. The debt ratio shows the proportion of assets that a company is financing through debt. The debt ratio for ALEX is a low 38.2%. This indicates that the company engages in conservative financing with opportunities to borrow in the future at no significant risk. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.
After an increase of 2.3%, Con Way (NYSE:CNW) has reached a current price of $30.90. The company is trading at a volume of 178,436 shares. This is a sign that there will be less trading activity than there was yesterday. 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. CNW has a D/E ratio of 97%. The D/E ratio is not a pure measurement of a company's debt because it includes operational liabilities in total liabilities.
Slipping 2%, Seaspan (NYSE:SSW) is currently trading at $16.97 per share. The company's volume is currently 58,588 shares for the day, 0.4 times its current daily average. When a stock price moves up or down, watching the volume is a good way of identifying how significant that shift is. 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 capitalization ratio is calculated by dividing long-term debt by the sum of long-term debt and shareholders' equity. SSW's capitalization ratio of 73.4% is relatively high. A company considered too highly leveraged (too much debt) may find its freedom of action restricted by its creditors and/or have its profitability hurt by high interest costs. A low level of debt and a healthy proportion of equity in a company's capital structure is an indication of financial fitness.
Kirby (NYSE:KEX) is up 1.8% to reach a current price of $53.73 per share. The company's volume for the day so far is 48,055 shares. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. 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/book value ratio is one of the more common methods of determining whether a stock is fairly valued. The P/B ratio for KEX is 1.94, 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. One problem with the P/B value ratio is that it can be difficult to calculate the true book value of a company, so investors should be aware that many measures of book value may provide only a rough estimate, and should be taken with a grain of salt. SEE: How Buybacks Warps The Price-To-Book Ratio
Currently trading at $17.10 per share, China Eastern Airlines Corp. Ltd (NYSE:CEA) has fallen 1.7%. With 1,256 shares changing hands so far today, the company's volume is 0.1 times its average over the past three months. Volume indicates the level of interest that investors have in a company at its current price. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. A simple P/E ratio can reveal the stock's real market value and show how the valuation compares to its industry group or a benchmark like the S&P 500 Index. The P/E ratio for CEA is 6.5, below the industry average of 45.09. 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: 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. Paying close attention to the previous ratios will help you identify key times to adjust your strategy. Keep in mind that all these ratios should be compared against historical numbers and industry information in order to get a more complete picture.