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Tickers in this Article: CPA, HOS, FWRD, KEX, KNX, CHRW, ALGT
The market has been doing well after the morning's trading. The Nasdaq is up 0.8%; the S&P 500 has moved up 0.8%; and the Dow has climbed 0.9%. 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.

Underperforming the market overall, the Transportation sector (IYT) is up 0.5%, and these are its current biggest movers:
CompanyMarket CapPercentage Change
Copa Holdings (NYSE:CPA).43 billion+1.8%
Hornbeck Offshore Services (NYSE:HOS).36 billion+1.8%
Forward (Nasdaq:FWRD)1.4 million+1.6%
Kirby (NYSE:KEX).89 billion+1.5%
Knight (NYSE:KNX).15 billion-1.3%
CH Robinson (Nasdaq:CHRW).08 billion+1.3%
Allegiant Travel (Nasdaq:ALGT).28 billion+1%
Broker Summary: Fidelity Online Brokerage

Copa Holdings (NYSE:CPA) is currently trading at $78.81 per share, a 1.8% increase. So far today, the company's volume is 55,363 shares, 0.2 times its current daily average. Volume indicates the level of interest that investors have in a company at its current price. 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 debt-equity (D/E) ratio is a leverage ratio. The D/E ratio for CPA is 82%. The D/E ratio percentage provides a much more dramatic perspective on a company's leverage position than the debt ratio percentage.

Hornbeck Offshore Services (NYSE:HOS) is at $39.04 per share after an increase of 1.8%. The company's volume for the day so far is 105,049 shares. If a stock price moves on high volume, this means that the change is a significant one. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. The price/book value ratio is calculated by dividing the current stock price by the company's book value per share. HOS has a P/B ratio of 1.26 which 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. 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: Investment Valuation Ratios: Price/Book Value Ratio

After an increase of 1.6%, Forward (Nasdaq:FWRD) has reached a current price of $33.55. At 22,857 shares, the company's volume so far today is while it was 80,595 shares 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. Investment valuation ratios can be very useful in estimating whether a stock price is too high, reasonable or a bargain investment opportunity. For investors primarily interested in the income a stock can generate, the dividend yield is an important determinant of how attractive a stock is. FWRD has a dividend yield of 1.2%, which is fairly low. A company with a low dividend yield may be a safer investment in the long run. High dividend yields are generally more important to value investors, investors in larger companies, and income oriented investors than they are to growth investors, investors in small cap stocks, and investors in new or emerging companies. SEE: Investment Valuation Ratios: Dividend Yield

Kirby (NYSE:KEX) has moved up 1.5% and is currently trading at $52.50 per share. So far today, 143,637 shares have changed hands. This is consistent with the average over the past three months. 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. Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. The price/earnings ratio is calculated by taking a stock price and dividing it by the earnings-per-share (EPS). KEX's P/E ratio of 14.0 is above the industry average of 6.77. Generally speaking, the higher the P/E ratio, the higher the market expectations for a company's future performance. To determine the P/E ratio, an investor divides the market price of the stock by the earnings-per-share (EPS) of the stock. SEE: Investment Valuation Ratios: Price/Earnings Ratio

Knight (NYSE:KNX) has fallen 1.3% and is currently trading at $14.24 per share. At 147,121 shares, the company's volume so far today is 0.2 times the average daily volume. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. Understanding investment valuation ratios allows an investor to assess the true value of an individual stock. 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. KNX's debt ratio of 33.7% is on the low side. In other words, the company is less sensitive to changes in business or interest rates since less of its cash flow is dedicated to paying off loan expenses. 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.

CH Robinson (Nasdaq:CHRW) is up 1.3% to reach a current price of $56.95 per share. The company is currently trading a volume of 355,877 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. In making a decision about a potential or existing investment, valuation ratios are useful as a basis for seeing whether the stock price is too high, reasonable, or a bargain. The price/sales ratio measures a company's stock market value by its total revenues or alternatively, a company's price per share by its revenue per share. The P/S ratio for CHRW is 0.88, which is relatively low. Low P/S ratios can indicate unrecognized value potential - so long as other criteria like high profit margins, low debt levels and growth prospects are in place. A limitation of the P/S ratio is that the price component measures only stock market captialization, while sales are a function of the entire capital structure, potentially leading to wide differences between levered and unlevered companies.

Allegiant Travel (Nasdaq:ALGT) has moved up 1% and is currently trading at $66.99 per share. So far today, the company's volume is 49,377 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. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. Using price/earnings ratios (P/E ratios) does not give an indication of whether or not an individual company's ratio is reasonable, a shortcoming that can be corrected by using the price/earnings to growth ratio (PEG ratio). PEG ratio for ALGT is 0.77. 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 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. 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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