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Consumer Cyclical Sector's Biggest Movers for July 18, 2012
The Nasdaq has moved up 1.2%, the S&P 500 has climbed 0.6% and the Dow is up 0.7% on a good day for the market so far. The consumer cyclical sector is a category of stocks that relies heavily on the business cycle and economic conditions. Consumer cyclicals include industries such as automotive, housing, entertainment and retail. The category can be further divided into durable and non-durable sections. Durable cyclicals include physical goods such as hardware or vehicles, while non-durables represent items like movies or hotel services. The performance of consumer cyclicals is highly related to the state of the economy. They represent goods and services that are not considered necessities, but luxurious purchases. During contractions or recessions, people have less disposable income to spend on consumer cyclicals. When the economy is expanding or booming, the sales of these goods rise as retail and leisure spending increase.
The Consumer Cyclical sector (XLY) is up 0.4%, underperforming the market overall. The biggest movers in the sector are currently:
Forex Broker Summary: Forex Capital Markets (FXCM)
Grainger (NYSE:GWW) has increased to a share price of $204.88, a 8.4% rise. This morning, 1.1 million shares have been traded, which is more trading activity than there was 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. Margin analysis tells us how effectively management can wring profits from sales and how much room a company has to withstand a downturn, fend off competition and make mistakes. GWW's gross profit margin is 45.4%. Operating profit measures how much cash the business throws off, and some consider it a more reliable measure of profitability since it is harder to manipulate with accounting tricks than net earnings. GWW has an operating profit margin of 13.9%. Net profit margin is a good tool for fundamental analysis and long-term investing but is less useful for technical analysts and short-term traders. The company has a net profit margin of 8.2%.
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 debt ratio shows the proportion of assets that a company is financing through debt. The debt ratio for GWW is a low 39.5%. A low debt ratio means the company has more available cash flow. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.
Tenneco (NYSE:TEN) has moved up 6.2% and is currently trading at $28.54 per share. So far today, the company's volume is 391,178 shares. This is 0.6 times the current three-month average. In technical analysis, trading volume is used to determine the strength of a market indicator. There are many tools investors can use to evaluate a stock, including margins. Margins, quite simply, are earnings expressed as a ratio, or a percentage of sales, and this allows investors to compare the profitability of different companies, while net earnings, which are presented as an absolute number, cannot. TEN has a low gross profit margin of 16%. Investors should track gross profit margin ratios over several years in order to see if earnings are consistent, growing or declining. Relative to its gross profit margin, TEN's operating profit margin of 5.2% and net profit margin of 1.9% are low.
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. TEN's D/E ratio of 2190% is on the high side. Generally, a high D/E ratio means that the company may have difficulty generating enough cash to pay off its debts. The D/E ratio percentage provides a much more dramatic perspective on a company's leverage position than the debt ratio percentage.
After rising 5%, Stanley Black & Decker, Inc (NYSE:SWK) is currently trading at a share price of $62.69. At 3.1 million shares, the company's volume so far today is 1.9 times the average daily volume. 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. Profit-margin ratios help us to keep score, as measured over time, of management's ability to generate profits and manage costs and expenses. There are three key profit-margin ratios: gross profit margin, operating profit margin and net profit margin. SWK has a gross profit margin of 40.6%. Operating profit gives investors an opportunity to do profit-margin comparisons between companies that do not issue a separate disclosure of their cost of goods sold figures (which are needed to do gross margin analysis). Operating profit margin for SWK is 5.9%. Ideally, a company's profit margin should be stable or rising; declining profit margin should be cause for concern or further investigation. Net profit margin for the company is 6%.
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 most important estimates of stock market valuation is the price/earnings ratio (P/E ratio). SWK's P/E ratio of 15.8 is above the industry average of 10.75. 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: The P/E Ratio: A Good Market-Timing Indicator
Increasing 4.5%, Shutterfly (Nasdaq:SFLY) is trading at $32.83 per share. The company is currently trading a volume of 244,794 shares. Volume is used to evaluate how meaningful the price movement of a stock is. Calculating the profit margin is a great way to gain insight into aspects of how well a company generates and retains money. Instead of measuring how much managers earn from assets, equity or invested capital, profit-margin ratios measure how far a company stretches its total revenue or total sales. SFLY's gross profit margin is 60.3%. All else being equal, investors should feel more confident investing in a company with a high operating margin than one with a low operating margin. SFLY has an operating profit margin of -20.9%. In other words, the company reported a net operating loss in the most recent quarter. Net profit margin is a good tool for fundamental analysis and long-term investing but is less useful for technical analysts and short-term traders. With a net profit margin of 2.3%, the company has a high one compared to its gross profit margin. A high net profit margin means a company is able to control its costs that buy goods and services at prices significantly higher than it costs to produce or provide them.
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/earnings to growth (PEG) ratio compares a company's P/E ratio to its earnings-per-share growth rate, which tells you whether or not you are a good value when purchasing a stock with a high price/earnings ratio (P/E ratio). SFLY's PEG ratio is 3.25. 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.
TRW Automotive (NYSE:TRW) is at $36.65 per share after an increase of 3.7%. The company's volume is currently 508,084 shares for the day, which is less activity than yesterday's volume of 977,630 shares. High volume indicates a lot of investor interest while low volume indicates the opposite. Profit-margin ratios can give investors deeper insight into management efficiency than earnings alone can provide. Gross profit margin, operating profit margin and net margin are commonly used margins. TRW has a low gross profit margin of 13.8%. This may mean that the company is struggling to control production costs, or that a low amount of earnings is being generated from revenues. TRW has an operating profit margin of 7.9% and a net profit margin of 6.6%, both low compared to its gross profit margin.
Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. The price/book value ratio is one of the more common methods of determining whether a stock is fairly valued. TRW's P/B ratio of 1.39 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: How Buybacks Warps The Price-To-Book Ratio
After an increase of 3.4%, Illinois Tool (NYSE:ITW) has reached a current price of $52.21. The company is currently trading a volume of 1.7 million shares. This is 0.5 times its current three-month average. If a stock price makes a big move up or down, volume lets us know the significance of that move. Margin analysis is a great way to understand the profitability of companies. ITW's gross profit margin is 37.3%. A company's operating margin is calculated by dividing operating income by revenues. ITW's operating profit margin of 15.5% is low relative to its gross profit margin. A high net profit margin indicates a highly profitable company, and a low profit margin indicates the opposite. Net margin is 10.7%.
Looking at a company's valuation ratios is a good way of getting a basic idea as to its value as an investment. The dividend yield is measured by taking the annual dividends per share and dividing that number by the stock price. ITW has a dividend yield of 2.9%. It is important to remember that dividends are only one component of a stock's return and capital appreciation (or decline) must also be considered when evaluating a security. SEE: Due Diligence On Dividends
Michael Kors (NYSE:KORS) is currently trading at $40.14 per share, a 3.1% increase. At 1.5 million shares, the company's volume so far today is 0.7 times the average daily volume. If a stock price moves on high volume, this means that the change is a significant one. Margin ratios highlight companies that are worth further examination. KORS has a gross profit margin of 58.2%. Operating margin is determined by taking operating income (income minus variable expenses) and dividing it by sales. KORS' operating profit margin is 0%. Tracking net profit margin over time for a single company can be a valuable tool for seeing how a business is developing. The company's net profit margin is 11.3%.
Investors can make use of valuation ratios to estimate whether a stock is fairly valued. The price/sales ratio measures a company's stock market price by its revenues. The P/S ratio for KORS is a high 6.89. This could be a good sign if the share price increases. 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.
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 Consumer Cyclical sector (XLY) is up 0.4%, underperforming the market overall. The biggest movers in the sector are currently:
| Company | Market Cap | Percentage Change |
| WW Grainger (NYSE:GWW) | $13.25 billion | +8.4% |
| Tenneco Inc. (NYSE:TEN) | $1.63 billion | +6.2% |
| Stanley Black & Decker, Inc. (NYSE:SWK) | $10.21 billion | +5% |
| Shutterfly, Inc. (Nasdaq:SFLY) | $1.12 billion | +4.5% |
| TRW Automotive Holdings Corp. (NYSE:TRW) | $4.34 billion | +3.7% |
| Illinois Tool Works (NYSE:ITW) | $24.11 billion | +3.4% |
| Michael Kors Holdings Ltd (NYSE:KORS) | $7.5 billion | +3.1% |
Grainger (NYSE:GWW) has increased to a share price of $204.88, a 8.4% rise. This morning, 1.1 million shares have been traded, which is more trading activity than there was 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. Margin analysis tells us how effectively management can wring profits from sales and how much room a company has to withstand a downturn, fend off competition and make mistakes. GWW's gross profit margin is 45.4%. Operating profit measures how much cash the business throws off, and some consider it a more reliable measure of profitability since it is harder to manipulate with accounting tricks than net earnings. GWW has an operating profit margin of 13.9%. Net profit margin is a good tool for fundamental analysis and long-term investing but is less useful for technical analysts and short-term traders. The company has a net profit margin of 8.2%.
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 debt ratio shows the proportion of assets that a company is financing through debt. The debt ratio for GWW is a low 39.5%. A low debt ratio means the company has more available cash flow. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.
Tenneco (NYSE:TEN) has moved up 6.2% and is currently trading at $28.54 per share. So far today, the company's volume is 391,178 shares. This is 0.6 times the current three-month average. In technical analysis, trading volume is used to determine the strength of a market indicator. There are many tools investors can use to evaluate a stock, including margins. Margins, quite simply, are earnings expressed as a ratio, or a percentage of sales, and this allows investors to compare the profitability of different companies, while net earnings, which are presented as an absolute number, cannot. TEN has a low gross profit margin of 16%. Investors should track gross profit margin ratios over several years in order to see if earnings are consistent, growing or declining. Relative to its gross profit margin, TEN's operating profit margin of 5.2% and net profit margin of 1.9% are low.
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. TEN's D/E ratio of 2190% is on the high side. Generally, a high D/E ratio means that the company may have difficulty generating enough cash to pay off its debts. The D/E ratio percentage provides a much more dramatic perspective on a company's leverage position than the debt ratio percentage.
After rising 5%, Stanley Black & Decker, Inc (NYSE:SWK) is currently trading at a share price of $62.69. At 3.1 million shares, the company's volume so far today is 1.9 times the average daily volume. 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. Profit-margin ratios help us to keep score, as measured over time, of management's ability to generate profits and manage costs and expenses. There are three key profit-margin ratios: gross profit margin, operating profit margin and net profit margin. SWK has a gross profit margin of 40.6%. Operating profit gives investors an opportunity to do profit-margin comparisons between companies that do not issue a separate disclosure of their cost of goods sold figures (which are needed to do gross margin analysis). Operating profit margin for SWK is 5.9%. Ideally, a company's profit margin should be stable or rising; declining profit margin should be cause for concern or further investigation. Net profit margin for the company is 6%.
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 most important estimates of stock market valuation is the price/earnings ratio (P/E ratio). SWK's P/E ratio of 15.8 is above the industry average of 10.75. 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: The P/E Ratio: A Good Market-Timing Indicator
Increasing 4.5%, Shutterfly (Nasdaq:SFLY) is trading at $32.83 per share. The company is currently trading a volume of 244,794 shares. Volume is used to evaluate how meaningful the price movement of a stock is. Calculating the profit margin is a great way to gain insight into aspects of how well a company generates and retains money. Instead of measuring how much managers earn from assets, equity or invested capital, profit-margin ratios measure how far a company stretches its total revenue or total sales. SFLY's gross profit margin is 60.3%. All else being equal, investors should feel more confident investing in a company with a high operating margin than one with a low operating margin. SFLY has an operating profit margin of -20.9%. In other words, the company reported a net operating loss in the most recent quarter. Net profit margin is a good tool for fundamental analysis and long-term investing but is less useful for technical analysts and short-term traders. With a net profit margin of 2.3%, the company has a high one compared to its gross profit margin. A high net profit margin means a company is able to control its costs that buy goods and services at prices significantly higher than it costs to produce or provide them.
TRW Automotive (NYSE:TRW) is at $36.65 per share after an increase of 3.7%. The company's volume is currently 508,084 shares for the day, which is less activity than yesterday's volume of 977,630 shares. High volume indicates a lot of investor interest while low volume indicates the opposite. Profit-margin ratios can give investors deeper insight into management efficiency than earnings alone can provide. Gross profit margin, operating profit margin and net margin are commonly used margins. TRW has a low gross profit margin of 13.8%. This may mean that the company is struggling to control production costs, or that a low amount of earnings is being generated from revenues. TRW has an operating profit margin of 7.9% and a net profit margin of 6.6%, both low compared to its gross profit margin.
Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. The price/book value ratio is one of the more common methods of determining whether a stock is fairly valued. TRW's P/B ratio of 1.39 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: How Buybacks Warps The Price-To-Book Ratio
After an increase of 3.4%, Illinois Tool (NYSE:ITW) has reached a current price of $52.21. The company is currently trading a volume of 1.7 million shares. This is 0.5 times its current three-month average. If a stock price makes a big move up or down, volume lets us know the significance of that move. Margin analysis is a great way to understand the profitability of companies. ITW's gross profit margin is 37.3%. A company's operating margin is calculated by dividing operating income by revenues. ITW's operating profit margin of 15.5% is low relative to its gross profit margin. A high net profit margin indicates a highly profitable company, and a low profit margin indicates the opposite. Net margin is 10.7%.
Looking at a company's valuation ratios is a good way of getting a basic idea as to its value as an investment. The dividend yield is measured by taking the annual dividends per share and dividing that number by the stock price. ITW has a dividend yield of 2.9%. It is important to remember that dividends are only one component of a stock's return and capital appreciation (or decline) must also be considered when evaluating a security. SEE: Due Diligence On Dividends
Michael Kors (NYSE:KORS) is currently trading at $40.14 per share, a 3.1% increase. At 1.5 million shares, the company's volume so far today is 0.7 times the average daily volume. If a stock price moves on high volume, this means that the change is a significant one. Margin ratios highlight companies that are worth further examination. KORS has a gross profit margin of 58.2%. Operating margin is determined by taking operating income (income minus variable expenses) and dividing it by sales. KORS' operating profit margin is 0%. Tracking net profit margin over time for a single company can be a valuable tool for seeing how a business is developing. The company's net profit margin is 11.3%.
Investors can make use of valuation ratios to estimate whether a stock is fairly valued. The price/sales ratio measures a company's stock market price by its revenues. The P/S ratio for KORS is a high 6.89. This could be a good sign if the share price increases. 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.
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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