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CNH Global NV and Other Capital Goods Stocks Making Big Moves on October 2, 2012
After the morning's trading, the Nasdaq has increased 0.4%, the S&P 500 has climbed 0.1% and the Dow has slipped 0.2%. The capital goods sector is the category of stocks related to the manufacture or distribution of goods. The sector is diverse, containing companies that manufacture machinery used to create capital goods, electrical equipment, aerospace and defense, engineering and construction projects. It is also referred to as the "industrials sector". Performance in the capital goods sector is sensitive to fluctuations in the business cycle. Because it relies heavily on manufacturing, the sector does well when the economy is booming or expanding. As economic conditions worsen, the demand for capital goods drops off, usually lowering the prices of stocks in the sector.
The biggest movers in the Capital Goods sector (XLI) (unchanged) are:
Broker Summary: E-Trade Financial
After an increase of 6.2%, Elbit Systems Ltd (Nasdaq:ESLT) has reached a current price of $36.53. The company's volume for the day so far is 8,980 shares. This is greater than yesterday's volume of 7,908 shares. 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. 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. For investors primarily interested in the income a stock can generate, the dividend yield is an important determinant of how attractive a stock is. Dividend yield for ESLT is 3.5%. A stock's dividend yield depends on the nature of a company's business, its posture in the marketplace (value or growth oriented), its earnings and cash flow, and its dividend policy. SEE: Investment Valuation Ratios: Dividend Yield
Currently trading at $19.19 per share, Apogee Enterprises (Nasdaq:APOG) has fallen 5.3%. At 192,497 shares, the company's volume so far today is 0.7 times the average daily volume. Volume is an important indicator because it indicates how significant a price shift is. 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. The price/sales ratio is used for spotting recovery situations or for double-checking that a company's growth has not become overvalued. The P/S ratio for APOG is 0.66, which is relatively low. Coupled with high relative strength in the previous twelve months, a low P/S ratio is one of the most potent combinations of investment criteria. 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.
Slipping 3.3%, Chart Industries (Nasdaq:GTLS) is currently trading at $71.65 per share. The company is currently trading a volume of 323,516 shares. Volume is used to evaluate how meaningful the price movement of a stock is. Looking at a company's valuation ratios is a good way of getting a basic idea as to its value as an investment. 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. GTLS' debt ratio of 46.4% is on the low side. A low debt ratio means the company has more available cash flow. 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.
Falling 3.1%, Thor Industries (NYSE:THO) is currently at a share price of $35.20. So far today, the company's volume is 350,979 shares, in keeping with its current three-month average. A stock's volume conveys how excited investors are about it. 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. A simple P/E ratio can reveal the stock's real market value and show how the valuation compares to its industry group or a benchmark like the S&P 500 Index. THO's P/E ratio of 16.1 is under the industry average of 25.29. A low P/E might arise due to substantial inherent risk of the firm and its operations, poor return on equity, or improper valuation of the market. 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: Profit With The Power Of Price-To-Earnings
After rising 3%, CNH Global NV (NYSE:CNH) is currently trading at a share price of $40.09. The company is trading at a volume of 129,609 shares. This is about the same trading activity as there was yesterday. 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. 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. CNH has a D/E ratio of 206%, which is relatively high. Companies with high D/E ratios may have difficulty attracting additional investment capital. The D/E ratio percentage provides a much more dramatic perspective on a company's leverage position than the debt ratio percentage.
After a decline of 2.2%, James Hardie Industries SE (NYSE:JHX) has hit a share price of $44.70. At 1,172 shares, the company's volume so far today is 0.2 times its current daily average. 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. 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. If the price/book value ratio of a stock is high, it may indicate that the stock is expensive, while a lower ratio may indicate that the stock is a bargain. JHX has a P/B ratio of 144.19 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. 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: Using The Price-To-Book Ratio To Evaluate Companies
Valmont Industries (NYSE:VMI) is currently trading at a share price of $127.93, a 2.2% decline. The company's volume for the day so far is 74,544 shares. When a stock price moves up or down, watching the volume is a good way of identifying how significant that shift is. Investment valuation ratios can be very useful in estimating whether a stock price is too high, reasonable or a bargain investment opportunity. Dividend yield is a way to measure how much cash flow you are getting for each dollar invested in an equity position - in other words, how much "bang for your buck" you are getting from dividends. VMI's dividend yield of 0.7% is fairly low. This could indicate that that the stock is overpriced or that future dividends might be higher. Simply comparing the level of dividends that two stocks pay does not give a true reflection of which security is more attractive, so investors calculate the dividend yield in order to standardize dividend payments. SEE: Guide To Stock-Picking Strategies: Income Investing
The Bottom Line On any given day, a particular stock may see positive or negative change in its share price. Daily stock performance should be weighed against historical performance and put in context of the market overall. However, these fundamental metrics must be analyzed with historic data, industry information in addition to firm specific financial statements.
The biggest movers in the Capital Goods sector (XLI) (unchanged) are:
| Company | Market Cap | Percentage Change |
| Elbit Systems Ltd (Nasdaq:ESLT) | $1.48 billion | +6.2% |
| Apogee Enterprises (Nasdaq:APOG) | $574.2 million | -5.3% |
| Chart Industries (Nasdaq:GTLS) | $2.22 billion | -3.3% |
| Thor Industries (NYSE:THO) | $1.92 billion | -3.1% |
| CNH Global NV (NYSE:CNH) | $9.33 billion | +3% |
| James Hardie Industries SE (NYSE:JHX) | $4 billion | -2.2% |
| Valmont Industries (NYSE:VMI) | $3.48 billion | -2.2% |
After an increase of 6.2%, Elbit Systems Ltd (Nasdaq:ESLT) has reached a current price of $36.53. The company's volume for the day so far is 8,980 shares. This is greater than yesterday's volume of 7,908 shares. 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. 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. For investors primarily interested in the income a stock can generate, the dividend yield is an important determinant of how attractive a stock is. Dividend yield for ESLT is 3.5%. A stock's dividend yield depends on the nature of a company's business, its posture in the marketplace (value or growth oriented), its earnings and cash flow, and its dividend policy. SEE: Investment Valuation Ratios: Dividend Yield
Currently trading at $19.19 per share, Apogee Enterprises (Nasdaq:APOG) has fallen 5.3%. At 192,497 shares, the company's volume so far today is 0.7 times the average daily volume. Volume is an important indicator because it indicates how significant a price shift is. 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. The price/sales ratio is used for spotting recovery situations or for double-checking that a company's growth has not become overvalued. The P/S ratio for APOG is 0.66, which is relatively low. Coupled with high relative strength in the previous twelve months, a low P/S ratio is one of the most potent combinations of investment criteria. 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.
Slipping 3.3%, Chart Industries (Nasdaq:GTLS) is currently trading at $71.65 per share. The company is currently trading a volume of 323,516 shares. Volume is used to evaluate how meaningful the price movement of a stock is. Looking at a company's valuation ratios is a good way of getting a basic idea as to its value as an investment. 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. GTLS' debt ratio of 46.4% is on the low side. A low debt ratio means the company has more available cash flow. 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.
Falling 3.1%, Thor Industries (NYSE:THO) is currently at a share price of $35.20. So far today, the company's volume is 350,979 shares, in keeping with its current three-month average. A stock's volume conveys how excited investors are about it. 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. A simple P/E ratio can reveal the stock's real market value and show how the valuation compares to its industry group or a benchmark like the S&P 500 Index. THO's P/E ratio of 16.1 is under the industry average of 25.29. A low P/E might arise due to substantial inherent risk of the firm and its operations, poor return on equity, or improper valuation of the market. 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: Profit With The Power Of Price-To-Earnings
After rising 3%, CNH Global NV (NYSE:CNH) is currently trading at a share price of $40.09. The company is trading at a volume of 129,609 shares. This is about the same trading activity as there was yesterday. 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. 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. CNH has a D/E ratio of 206%, which is relatively high. Companies with high D/E ratios may have difficulty attracting additional investment capital. The D/E ratio percentage provides a much more dramatic perspective on a company's leverage position than the debt ratio percentage.
After a decline of 2.2%, James Hardie Industries SE (NYSE:JHX) has hit a share price of $44.70. At 1,172 shares, the company's volume so far today is 0.2 times its current daily average. 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. 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. If the price/book value ratio of a stock is high, it may indicate that the stock is expensive, while a lower ratio may indicate that the stock is a bargain. JHX has a P/B ratio of 144.19 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. 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: Using The Price-To-Book Ratio To Evaluate Companies
Valmont Industries (NYSE:VMI) is currently trading at a share price of $127.93, a 2.2% decline. The company's volume for the day so far is 74,544 shares. When a stock price moves up or down, watching the volume is a good way of identifying how significant that shift is. Investment valuation ratios can be very useful in estimating whether a stock price is too high, reasonable or a bargain investment opportunity. Dividend yield is a way to measure how much cash flow you are getting for each dollar invested in an equity position - in other words, how much "bang for your buck" you are getting from dividends. VMI's dividend yield of 0.7% is fairly low. This could indicate that that the stock is overpriced or that future dividends might be higher. Simply comparing the level of dividends that two stocks pay does not give a true reflection of which security is more attractive, so investors calculate the dividend yield in order to standardize dividend payments. SEE: Guide To Stock-Picking Strategies: Income Investing
The Bottom Line On any given day, a particular stock may see positive or negative change in its share price. Daily stock performance should be weighed against historical performance and put in context of the market overall. However, these fundamental metrics must be analyzed with historic data, industry information in addition to firm specific financial statements.
by
Investopedia Staff
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