Free Annual Reports
Cliffs Natural Resources and Other Basic Materials Stocks Making Big Moves on August 20, 2012
On a bad day for the market, the Nasdaq has declined 0.2%, the S&P 500 has decreased 0.3% and the Dow has fallen 0.2%. The basic materials sector is the category of stocks that accounts for companies involved with the discovery, development and processing of raw materials. This sector includes the mining and refining of metals, chemical producers and forestry products. The basic materials sector is sensitive to changes in the business cycle. Because the sector supplies materials for construction, it depends on a strong economy. This sector is also sensitive to supply and demand fluctuations because the price of raw materials, such as gold or other metals, is largely demand driven.
The Basic Materials sector (XLB) is down 0.7%, underperforming the market overall. The current biggest movers in the sector are:
Forex Broker Summary: UFXMarkets
Currently trading at $223.95 per share, Terra Nitrogen Company (NYSE:TNH) has fallen 3.4%. At 17,991 shares, the company's volume so far today is 0.6 times its average over the past three months. In technical analysis, trading volume is used to determine the strength of a market indicator. 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 ratio is calculated by dividing total liabilities by total assets. TNH has a low debt ratio of 9.3%. 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. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.
Cliffs Natural Resources (NYSE:CLF) is currently trading at a share price of $41.07, a 2.7% decline. The company is trading at a volume of two million shares. This is on pace to reach yesterday's trading volume of 3.5 million shares. High volume indicates a lot of investor interest while low volume indicates the opposite. Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. The price/earnings ratio is calculated by taking a stock price and dividing it by the earnings-per-share (EPS). CLF's P/E ratio of 4.5 is under the industry average of 12.01. Companies with low P/E ratios may find it easier to surprise the market to the upside, even if their financial performance is not as strong as that of companies with high P/E ratios. High P/E stocks could be "growth" stocks, while low PE stocks may be "value" stocks. SEE: Understanding The P/E Ratio
Rising 2.6%, Braskem SA (NYSE:BAK) is currently trading at $15.14 per share. The company's volume is currently 205,581 shares for the day, in line with the current daily average. The trading volume for a stock indicates the level of investor interest. Investment valuation ratios can be very useful in determining the value of a stock, but it is very important to keep in mind that while some financial ratios have general rules (or a broad application), in most instances it is a prudent practice to look at a company's historical performance and use peer company/industry comparisons to put any given company's ratio in perspective. 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. BAK has a capitalization ratio of 57.9%, which is on the high end. The company may have trouble meeting operating and debt liabilities on time and surviving adverse economic conditions. The capitalization ratio is one of the more meaningful debt ratios because it focuses on the relationship of debt liabilities as a component of a company's total capital base, which is the capital raised by shareholders and lenders.
After an increase of 2.2%, EnPro Industries (NYSE:NPO) has reached a current price of $37.30. The company's volume for the day so far is 100,125 shares. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. 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 price/book value ratio is calculated by dividing the current stock price by the company's book value per share. NPO's stock is trading for more than its book value with a P/B ratio of 1.49. This may be a sign that the company is overvalued. P/B has its shortcomings but is still widely used as a valuation metric, more relevant for use by investors looking at capital-intensive or finance-related businesses, such as banks; book value does not carry much meaning for service-based firms with few tangible assets. SEE: How Buybacks Warps The Price-To-Book Ratio
After a decline of 1.9%, W.R (NYSE:GRA) has hit a share price of $58.62. So far today, the company's volume is 109,111 shares, 0.2 times the current three-month average. If a stock price makes a big move up or down, volume lets us know the significance of that move. Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. A price/sales ratio is derived by dividing stock market price by company sales. The P/S ratio for GRA is 1.15, which is relatively high. In young companies, a high P/S ratio is a sign of sales growth that is expected to turn into earnings and cash flow. All things being equal, a low P/S ratio is good news for investors, while a very high one can be a warning sign.
Slipping 1.9%, Haynes International (Nasdaq:HAYN) is currently trading at $50.32 per share. So far today, the company's volume is 19,095 shares. At this rate, trading activity will likely be down from yesterday when 110,477 shares changed hands. Volume is an important indicator because it indicates how significant a price shift is. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. The debt ratio shows the proportion of assets that a company is financing through debt. HAYN's debt ratio is 50.9%. 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.
TPC Group (Nasdaq:TPCG) is up 1.7% to reach a current price of $40.13 per share. At 36,829 shares, the company's volume so far today is 0.3 times the average daily volume. If a stock price moves on high volume, this means that the change is a significant one. 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. One of the most important estimates of stock market valuation is the price/earnings ratio (P/E ratio). Compared to the industry average of 14.94, TPCG's P/E ratio of 49.4 is quite high. This could mean that the market is expecting big things over the next few months or years. From the investor's perspective, a stock with a lower ratio is relatively cheaper than a stock with a higher ratio. SEE: Investment Valuation Ratios: Price/Earnings Ratio
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. Keep in mind that all these ratios should be compared against historical numbers and industry information in order to get a more complete picture.
The Basic Materials sector (XLB) is down 0.7%, underperforming the market overall. The current biggest movers in the sector are:
| Company | Market Cap | Percentage Change |
| Terra Nitrogen Company (NYSE:TNH) | $4.29 billion | -3.4% |
| Cliffs Natural Resources (NYSE:CLF) | $6.02 billion | -2.7% |
| Braskem SA (NYSE:BAK) | $5.91 billion | +2.6% |
| EnPro Industries (NYSE:NPO) | $755.7 million | +2.2% |
| W.R (NYSE:GRA) | $4.48 billion | -1.9% |
| Haynes International (Nasdaq:HAYN) | $630.4 million | -1.9% |
| TPC Group (Nasdaq:TPCG) | $618.5 million | +1.7% |
Currently trading at $223.95 per share, Terra Nitrogen Company (NYSE:TNH) has fallen 3.4%. At 17,991 shares, the company's volume so far today is 0.6 times its average over the past three months. In technical analysis, trading volume is used to determine the strength of a market indicator. 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 ratio is calculated by dividing total liabilities by total assets. TNH has a low debt ratio of 9.3%. 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. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.
Cliffs Natural Resources (NYSE:CLF) is currently trading at a share price of $41.07, a 2.7% decline. The company is trading at a volume of two million shares. This is on pace to reach yesterday's trading volume of 3.5 million shares. High volume indicates a lot of investor interest while low volume indicates the opposite. Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. The price/earnings ratio is calculated by taking a stock price and dividing it by the earnings-per-share (EPS). CLF's P/E ratio of 4.5 is under the industry average of 12.01. Companies with low P/E ratios may find it easier to surprise the market to the upside, even if their financial performance is not as strong as that of companies with high P/E ratios. High P/E stocks could be "growth" stocks, while low PE stocks may be "value" stocks. SEE: Understanding The P/E Ratio
Rising 2.6%, Braskem SA (NYSE:BAK) is currently trading at $15.14 per share. The company's volume is currently 205,581 shares for the day, in line with the current daily average. The trading volume for a stock indicates the level of investor interest. Investment valuation ratios can be very useful in determining the value of a stock, but it is very important to keep in mind that while some financial ratios have general rules (or a broad application), in most instances it is a prudent practice to look at a company's historical performance and use peer company/industry comparisons to put any given company's ratio in perspective. 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. BAK has a capitalization ratio of 57.9%, which is on the high end. The company may have trouble meeting operating and debt liabilities on time and surviving adverse economic conditions. The capitalization ratio is one of the more meaningful debt ratios because it focuses on the relationship of debt liabilities as a component of a company's total capital base, which is the capital raised by shareholders and lenders.
After an increase of 2.2%, EnPro Industries (NYSE:NPO) has reached a current price of $37.30. The company's volume for the day so far is 100,125 shares. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. 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 price/book value ratio is calculated by dividing the current stock price by the company's book value per share. NPO's stock is trading for more than its book value with a P/B ratio of 1.49. This may be a sign that the company is overvalued. P/B has its shortcomings but is still widely used as a valuation metric, more relevant for use by investors looking at capital-intensive or finance-related businesses, such as banks; book value does not carry much meaning for service-based firms with few tangible assets. SEE: How Buybacks Warps The Price-To-Book Ratio
After a decline of 1.9%, W.R (NYSE:GRA) has hit a share price of $58.62. So far today, the company's volume is 109,111 shares, 0.2 times the current three-month average. If a stock price makes a big move up or down, volume lets us know the significance of that move. Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. A price/sales ratio is derived by dividing stock market price by company sales. The P/S ratio for GRA is 1.15, which is relatively high. In young companies, a high P/S ratio is a sign of sales growth that is expected to turn into earnings and cash flow. All things being equal, a low P/S ratio is good news for investors, while a very high one can be a warning sign.
Slipping 1.9%, Haynes International (Nasdaq:HAYN) is currently trading at $50.32 per share. So far today, the company's volume is 19,095 shares. At this rate, trading activity will likely be down from yesterday when 110,477 shares changed hands. Volume is an important indicator because it indicates how significant a price shift is. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. The debt ratio shows the proportion of assets that a company is financing through debt. HAYN's debt ratio is 50.9%. 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.
TPC Group (Nasdaq:TPCG) is up 1.7% to reach a current price of $40.13 per share. At 36,829 shares, the company's volume so far today is 0.3 times the average daily volume. If a stock price moves on high volume, this means that the change is a significant one. 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. One of the most important estimates of stock market valuation is the price/earnings ratio (P/E ratio). Compared to the industry average of 14.94, TPCG's P/E ratio of 49.4 is quite high. This could mean that the market is expecting big things over the next few months or years. From the investor's perspective, a stock with a lower ratio is relatively cheaper than a stock with a higher ratio. SEE: Investment Valuation Ratios: Price/Earnings Ratio
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. Keep in mind that all these ratios should be compared against historical numbers and industry information in order to get a more complete picture.
by
Investopedia Staff
Investopedia.com believes that individuals can excel at managing their financial affairs. As such, we strive to provide free educational content and tools to empower individual investors, including thousands of original and objective articles and tutorials on a wide variety of financial topics.
Free Annual Reports
