The market is currently up, with the Nasdaq climbing 0.6%, the S&P 500 rising 0.5% and the Dow up 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 up 0.1%, underperforming the market overall. The biggest movers in the sector are currently:
|Company||Market Cap||Percentage Change|
|Golar LNG Limited (Nasdaq:GLNG)||$3.11 billion||+3.7%|
|China Eastern Airlines Corp. Ltd (NYSE:CEA)||$3.6 billion||+2.2%|
|Golar LNG (Nasdaq:GMLP)||$716 million||-2%|
|Air (Nasdaq:AIRM)||$1.48 billion||+1.4%|
|Spirit Airlines (Nasdaq:SAVE)||$1.4 billion||-1.2%|
|American Railcar Industries (Nasdaq:ARII)||$640.8 million||+1.1%|
|Genesee & Wyoming (NYSE:GWR)||$2.71 billion||+0.9%|
Forex Broker Summary: UFXMarkets
Golar LNG Limited (Nasdaq:GLNG) has increased to a share price of $40.19, a 3.7% rise. This morning, the company is trading a volume of 482,618 shares. Volume is used to evaluate how meaningful the price movement of a stock is. Investment valuation ratios can be very useful in estimating whether a stock price is too high, reasonable or a bargain investment opportunity. 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. GLNG has a high debt ratio of 71.7%. This means that the company's cash flow is significantly impacted by paying off principal and interest and that any negative change in performance or rise in interest rates could result in default. 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.
China Eastern Airlines Corp. Ltd (NYSE:CEA) has risen 2.2% and is currently trading at $16.32 per share. So far today, the company's volume is 4,110 shares, lighter than yesterday's volume of 23,325 shares. Volume is an important indicator because it indicates how significant a price shift is. Valuation ratios allow the investor to make a quick determination as to a company's investment value. The debt-equity (D/E) ratio is a leverage ratio. CEA has a D/E ratio of 186%, which is relatively high. Companies with high D/E ratios may have difficulty attracting additional investment capital. The D/E ratio is not a pure measurement of a company's debt because it includes operational liabilities in total liabilities.
Falling 2%, Golar LNG (Nasdaq:GMLP) is currently at a share price of $30.36. The company is currently trading a volume of 25,858 shares. This is 0.4 times its current three-month average. 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. The capitalization ratio is calculated by dividing long-term debt by the sum of long-term debt and shareholders' equity. The capitalization ratio for GMLP is 96%, which is fairly high. A high capitalization ratio is not necessarily bad since higher financial leverage can increase the return on a shareholder's investment. 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.
After rising 1.4%, Air (Nasdaq:AIRM) is currently trading at a share price of $116.79. At 38,929 shares, the company's volume so far today is 0.6 times its current daily average. The trading volume for a stock indicates the level of investor interest. 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 compares a company's P/E ratio to its earnings-per-share growth rate, which tells you whether or not you are getting a good value when purchasing a stock with a high price/earnings ratio (P/E ratio). PEG ratio for AIRM is consistent with the industry average at 1.18. Because of the adjustment for earnings growth rate, the PEG ratio is somewhat more useful than many formulas for comparing companies in different industries.
At $19.13, Spirit Airlines (Nasdaq:SAVE) has slipped 1.2%. So far today, the company's volume is 107,932 shares. If a stock price makes a big move up or down, volume lets us know the significance of that move. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. The price/book value ratio is calculated by dividing the current stock price by the company's book value per share. SAVE's P/B ratio of 2.63 shows that its share price is higher than its book value. This may be a sign that the company is overvalued. 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: Using The Price-To-Book Ratio To Evaluate Companies
Rising 1.1%, American Railcar Industries (Nasdaq:ARII) is currently trading at $30.33 per share. At 8,075 shares, the company's volume so far today is which is likely to result in less activity than yesterday's volume of 44,430 shares. If a stock price makes a big move up or down, volume lets us know the significance of that move. 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. One of the most important estimates of stock market valuation is the price/earnings ratio (P/E ratio). The P/E ratio for ARII is 18.4, above the industry average of 9.77. Usually, if a stock has a high P/E ratio, it indicates that the market expects the company to grow earnings quickly in the future. A high P/E ratio indicates a stock that is expensive, while a low P/E ratio indicates a stock that is cheap. SEE: Can Investors Trust the P/E Ratio?
Genesee & Wyoming (NYSE:GWR) is currently trading at $63.94 per share, a 0.9% increase. So far today, the company's volume is 30,541 shares. This is 0.2 times the average volume over the last three months. Volume indicates the level of interest that investors have in a company at its current price. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. The price/sales ratio measures a company's stock market price by its revenues. The P/S ratio for GWR is a high 3.42. 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.
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.