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Tickers in this Article: CHRW, LCC, SFL, EXPD, CP, UAL, RYAAY
Currently, the Nasdaq has fallen 0.8%, the S&P 500 is down 0.2% and the Dow is up 0.4%. 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.

These are the biggest movers in the Transportation sector (IYT) (+0.7%):
CompanyMarket CapPercentage Change
CH Robinson Worldwide (Nasdaq:CHRW).15 billion-7.9%
US Airways Group (NYSE:LCC).88 billion+6%
Ship Finance International Limited (NYSE:SFL).14 billion-3.3%
Expeditors Intl (Nasdaq:EXPD).8 billion-2.3%
Canadian Pacific Railway Limited (USA) (NYSE:CP).53 billion+2.2%
United Continental Holdings Inc (NYSE:UAL).77 billion+2.1%
Ryanair Holdings plc (ADR) (Nasdaq:RYAAY).17 billion+2%
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CH Robinson (Nasdaq:CHRW) is down 7.9% to reach $51.81 per share. So far today, the company's volume is 3.4 million shares, 2.6 times the average daily volume. In technical analysis, trading volume is used to determine the strength of a market indicator. 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 P/E ratio has been used for ages by analysts and still remains one of the most relevant pieces of stock valuation. CHRW has a P/E ratio of 20.9. 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: The P/E Ratio: A Good Market-Timing Indicator

US Airways (NYSE:LCC) has risen 6% and is currently trading at $12.29 per share. The company is currently trading a volume of 3.8 million 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 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 shows the proportion of assets that a company is financing through debt. The debt ratio for LCC is 97.7%, which is relatively high. 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. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.

At $13.89, Ship Finance (NYSE:SFL) has slipped 3.3%. With 174,506 shares changing hands so far today, the company's volume is 0.6 times its average over the past three months. Volume indicates the level of interest that investors have in a company at its current price. 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 dividend yield is measured by taking the annual dividends per share and dividing that number by the stock price. Dividend yield for SFL is 10.9%, which is fairly high. This could be a sign that the company is a "dividend trap" as companies with high dividends can be risky investments. A higher dividend yield may indicate a risk of a fall in the price of the security, or a cut in the level of dividend payments, either of which would have the effect of dropping future returns. SEE: Due Diligence On Dividends

So far today, the company's volume is 782,145 shares. At this rate, trading activity will likely be down from yesterday when 2.7 million shares changed hands. 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. Investment valuation ratios can be very useful in estimating whether a stock price is too high, reasonable or a bargain investment opportunity. In a nutshell, the price/sales ratio shows how much Wall Street values every dollar of the company's sales. EXPD has a high P/S ratio of 1.62. In young companies, a high P/S ratio is a sign of sales growth that is expected to turn into earnings and cash flow. 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.

Canadian Pacific Railway Limited (NYSE:CP) is currently trading at $75.14 per share, a 2.2% increase. At 331,876 shares, the company's volume so far today is in line with the current daily average. Volume is an important indicator because it indicates how significant a price shift is. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. One of the favorite tools of many value investors is analyzing price/book value ratios, as it provides a measure of the underlying value of a company's assets as compared to the valuation of its equity. CP's P/B ratio of 2.67 shows that its share price is higher than its book value. It is important to take the company's debt into account when using the P/B ratio as debt can boost a company's liabilities to the point where they wipe out much of the book value of its hard assets, creating artificially high P/B values. A weakness of the P/B value ratio is that while the price component is easily determined by looking at the stock quote, the book value component is more difficult to estimate and more open to individual interpretation and analysis. SEE: Investment Valuation Ratios: Price/Book Value Ratio

United Continental Holdings (NYSE:UAL) has risen 2.1% to hit a current price of $20.80 per share. This morning, the company is trading a volume of 1.8 million shares. Volume is used to evaluate how meaningful the price movement of a stock is. Understanding investment valuation ratios allows an investor to assess the true value of an individual stock. To a large degree, the debt-equity (D/E) ratio provides another vantage point on a company's leverage position, in this case, comparing total liabilities to shareholders' equity, as opposed to total assets in the debt ratio. The D/E ratio for UAL is 824%. 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.

After rising 2%, Ryanair Holdings plc (Nasdaq:RYAAY) is currently trading at a share price of $28.46. The company's volume for the day so far is 410,828 shares, 1.7 times its current three-month average. 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. 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 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. RYAAY has a capitalization ratio of 50.7%, which is on the high end. 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. 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.

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.

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