Filed Under: ,
Tickers in this Article: GOL, RYAAY, ASR, GMT, KEX, CHRW, LFL
The Nasdaq has risen 0.6%, the S&P 500 has increased 0.3% and the Dow has moved up 0.3%, marking a bad morning for the market. 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 0.5%, underperforming the market overall. The biggest movers in the sector are currently:
CompanyMarket CapPercentage Change
Gol Linhas Aereas Inteligentes SA (ADR) (NYSE:GOL).47 billion-6%
Ryanair Holdings plc (ADR) (Nasdaq:RYAAY).55 billion+2.8%
Grupo Aeroportuario del Sureste (ADR) (NYSE:ASR).57 billion+1.8%
GATX Corporation (NYSE:GMT).93 billion+1.5%
Kirby Corporation (NYSE:KEX).95 billion+1.4%
CH Robinson Worldwide (Nasdaq:CHRW).82 billion+1.3%
Lan Airlines S.A. (ADR) (NYSE:LFL).88 billion-1.3%
Broker Summary: OptionsXpress Online Trading Platform

Gol Linhas Aereas Inteligentes SA (NYSE:GOL) has decreased to $5.12 per share, a 6% fall. So far today, 2.7 million shares have changed hands. When a stock price moves up or down, watching the volume is a good way of identifying how significant that shift is. A wide array of ratios can be used by investors to estimate the attractiveness of a potential or existing investment and get an idea of its valuation. The debt-equity (D/E) ratio compares the total liabilities for a company to its total shareholder equity. GOL has a D/E ratio of 219%, which is relatively high. This shows that the company's assets are financed primarily through debt. The D/E ratio is not a pure measurement of a company's debt because it includes operational liabilities in total liabilities.

Ryanair Holdings plc (Nasdaq:RYAAY) has moved up 2.8% and is currently trading at $30.50 per share. The company's volume is currently 143,497 shares for the day, 1.2 times the average daily volume. If a stock price moves on high volume, this means that the change is a significant one. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. The easy-to-calculate debt ratio is helpful to investors looking for a quick take on the leverage for a company. The debt ratio for RYAAY is 65.6%, which is relatively high. As such, the company is highly leveraged and not highly liquid. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.

Increasing 1.8%, Grupo Aeroportuario del Sureste (NYSE:ASR) is trading at $87.37 per share. So far today, the company's volume is 26,106 shares. This is on pace to fall short of yesterday's volume of 68,240 shares. The trading volume for a stock indicates the level of investor 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 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. ASR's capitalization ratio is 0.7%, which is relatively low. Low leverage is a significant balance sheet strength, a sign of a less risky investment. A low level of debt and a healthy proportion of equity in a company's capital structure is an indication of financial fitness.

After rising 1.5%, GATX (NYSE:GMT) is currently trading at a share price of $41.66. So far today, the company's volume is 60,876 shares, 0.2 times the current three-month average. Volume is used to evaluate how meaningful the price movement of a stock is. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. The price/book value ratio is one of the more common methods of determining whether a stock is fairly valued. GMT's P/B ratio of 1.67 shows that its share price is higher than its book value. This may be a sign that the company is overvalued. To put things in perspective, should be made among companies in the same industry rather than across industries. SEE: How Buybacks Warps The Price-To-Book Ratio

Kirby (NYSE:KEX) has risen 1.4% and is currently trading at $53.48 per share. The company's volume for the day so far is 47,657 shares. Volume indicates the level of interest that investors have in a company at its current price. Valuation ratios allow the investor to make a quick determination as to a company's investment value. A price/sales ratio is derived by dividing stock market price by company sales. The P/S ratio for KEX is a high 1.2. 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 compare P/S ratios for companies in the same industry, as ratios can vary quite widely for companies in different industries.

CH Robinson (Nasdaq:CHRW) is up 1.3% to reach a current price of $55.34 per share. At 573,246 shares, the company's volume so far today is consistent with its current daily average. In technical analysis, trading volume is used to determine the strength of a market indicator. Investment valuation ratios can be very useful in estimating whether a stock price is too high, reasonable or a bargain investment opportunity. Perhaps one of the most widely-used stock analysis tools is the price-to-earnings ratio, or P/E. CHRW's P/E ratio of 19.7 is above the industry average of 6.53. 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. High P/E stocks could be "growth" stocks, while low PE stocks may be "value" stocks. SEE: The P/E Ratio: A Good Market-Timing Indicator

Lan Airlines S.A (NYSE:LFL) is currently trading at a share price of $22.92, a 1.3% decline. So far today, 135,282 shares of the company's stock have changed hands. At this rate, trading activity will likely be down from yesterday when 367,257 shares changed hands. 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. Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. The debt ratio shows the proportion of assets that a company is financing through debt. LFL's debt ratio of 80.2% is fairly high. This means that most of the company's assets are financed through debt. 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.

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.

comments powered by Disqus

Trading Center