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Consumer Cyclical Sector's Biggest Movers: Fossil, Inc. and More
On a good day for the market, the Nasdaq has climbed 0.1%, the S&P 500 has moved up 0.2% and the Dow is up 0.3%. 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 down 0.5% on a good day for the market overall. The biggest movers in the sector so far are:
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Visteon (NYSE:VC) has soared 10.3% to reach a current price of $38.82 per share. The company's volume for the morning is 988,098 shares. This is 0.9 times the average daily volume. The trading volume for a stock indicates the level of investor 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. 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. VC has a P/E ratio of 31.1, high compared to the industry average of 9.18. 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: Understanding The P/E Ratio
At $20.66, Maidenform Brands (NYSE:MFB) has slipped 7.5%. The company's volume is currently 177,675 shares for the day,. Volume is used to evaluate how meaningful the price movement of a stock is. 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. 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. MFB's capitalization ratio is 22.7%, which is relatively low. Low leverage is a significant balance sheet strength, a sign of a less risky investment. Prudent use of leverage (debt) increases the financial resources available to a company for growth and expansion.
Tesla Motors (Nasdaq:TSLA) is down 5% to reach $28.73 per share. This morning, the company is trading a volume of 542,339 shares. High volume indicates a lot of investor interest while low volume indicates the opposite. 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. 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. TSLA has a P/B ratio of 19.68 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. Users need to be careful when applying this ratio though, as it is more useful for industrial companies that have a lot of tangible assets than it is for technology or consumer product companies that may not have much in the way of hard assets. SEE: How Buybacks Warps The Price-To-Book Ratio
Slipping 4.7%, Fossil (Nasdaq:FOSL) is currently trading at $87.47 per share. The company's volume is currently 1.5 million shares for the day, 0.8 times the average volume over the last three months. 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. In a nutshell, the price/sales ratio shows how much Wall Street values every dollar of the company's sales. The P/S ratio for FOSL is 3.11, 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. It is important to keep in mind when looking at the P/S ratio that just because a company is generating revenues, this does not mean that the company is profitable, and in the long run, profits drive stock prices.
Allison Transmission Holdings (NYSE:ALSN) is currently trading at $18.57 per share, a 3.9% increase. So far this morning, 124,869 shares have changed hands. This is 0.3 times its current daily average. If a stock price makes a big move up or down, volume lets us know the significance of that move. Investment valuation ratios can be very useful in estimating whether a stock price is too high, reasonable or a bargain investment opportunity. 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. ALSN has a debt ratio of 74.6%, which is on the high side. 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.
Rush Enterprises (Nasdaq:RUSHA) is currently trading at $16.86 per share, a 2.7% increase. So far today, 34,427 shares have changed hands, lighter than yesterday's volume of 205,725 shares. A stock's volume conveys how excited investors are about it. 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. RUSHA has a D/E ratio of 180%, which is relatively high. Generally, a high D/E ratio means that the company may have difficulty generating enough cash to pay off its debts. This easy-to-calculate ratio provides a general indication of a company's equity-liability relationship and is helpful to investors looking for a quick take on a company's leverage.
Bally Technologies (NYSE:BYI) has risen 2.6% to hit a current price of $42.97 per share. The company's volume for the day so far is 366,236 shares. In technical analysis, trading volume is used to determine the strength of a market indicator. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. Price/earnings ratios (P/E ratios) provide a measure of the relative value of a stock. Compared to the industry average of 10.23, BYI's P/E ratio of 19.3 is quite high. 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. A high P/E ratio indicates a stock that is expensive, while a low P/E ratio indicates a stock that is cheap. SEE: Profit With The Power Of Price-To-Earnings
The Bottom Line The nature of the market is such that stocks will have good days and bad days. Paying close attention to the previous ratios will help you identify key times to adjust your strategy. 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.
The Consumer Cyclical sector (XLY) is down 0.5% on a good day for the market overall. The biggest movers in the sector so far are:
| Company | Market Cap | Percentage Change |
| Visteon Corporation (NYSE:VC) | $1.85 billion | +10.3% |
| Maidenform Brands, Inc. (NYSE:MFB) | $525.8 million | -7.5% |
| Tesla Motors Inc (Nasdaq:TSLA) | $3.19 billion | -5% |
| Fossil, Inc. (Nasdaq:FOSL) | $5.68 billion | -4.7% |
| Allison Transmission Holdings Inc (NYSE:ALSN) | $3.24 billion | +3.9% |
| Rush Enterprises, Inc. (Nasdaq:RUSHA) | $634.4 million | +2.7% |
| Bally Technologies Inc. (NYSE:BYI) | $1.81 billion | +2.6% |
Visteon (NYSE:VC) has soared 10.3% to reach a current price of $38.82 per share. The company's volume for the morning is 988,098 shares. This is 0.9 times the average daily volume. The trading volume for a stock indicates the level of investor 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. 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. VC has a P/E ratio of 31.1, high compared to the industry average of 9.18. 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: Understanding The P/E Ratio
At $20.66, Maidenform Brands (NYSE:MFB) has slipped 7.5%. The company's volume is currently 177,675 shares for the day,. Volume is used to evaluate how meaningful the price movement of a stock is. 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. 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. MFB's capitalization ratio is 22.7%, which is relatively low. Low leverage is a significant balance sheet strength, a sign of a less risky investment. Prudent use of leverage (debt) increases the financial resources available to a company for growth and expansion.
Tesla Motors (Nasdaq:TSLA) is down 5% to reach $28.73 per share. This morning, the company is trading a volume of 542,339 shares. High volume indicates a lot of investor interest while low volume indicates the opposite. 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. 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. TSLA has a P/B ratio of 19.68 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. Users need to be careful when applying this ratio though, as it is more useful for industrial companies that have a lot of tangible assets than it is for technology or consumer product companies that may not have much in the way of hard assets. SEE: How Buybacks Warps The Price-To-Book Ratio
Allison Transmission Holdings (NYSE:ALSN) is currently trading at $18.57 per share, a 3.9% increase. So far this morning, 124,869 shares have changed hands. This is 0.3 times its current daily average. If a stock price makes a big move up or down, volume lets us know the significance of that move. Investment valuation ratios can be very useful in estimating whether a stock price is too high, reasonable or a bargain investment opportunity. 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. ALSN has a debt ratio of 74.6%, which is on the high side. 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.
Rush Enterprises (Nasdaq:RUSHA) is currently trading at $16.86 per share, a 2.7% increase. So far today, 34,427 shares have changed hands, lighter than yesterday's volume of 205,725 shares. A stock's volume conveys how excited investors are about it. 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. RUSHA has a D/E ratio of 180%, which is relatively high. Generally, a high D/E ratio means that the company may have difficulty generating enough cash to pay off its debts. This easy-to-calculate ratio provides a general indication of a company's equity-liability relationship and is helpful to investors looking for a quick take on a company's leverage.
Bally Technologies (NYSE:BYI) has risen 2.6% to hit a current price of $42.97 per share. The company's volume for the day so far is 366,236 shares. In technical analysis, trading volume is used to determine the strength of a market indicator. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. Price/earnings ratios (P/E ratios) provide a measure of the relative value of a stock. Compared to the industry average of 10.23, BYI's P/E ratio of 19.3 is quite high. 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. A high P/E ratio indicates a stock that is expensive, while a low P/E ratio indicates a stock that is cheap. SEE: Profit With The Power Of Price-To-Earnings
The Bottom Line The nature of the market is such that stocks will have good days and bad days. Paying close attention to the previous ratios will help you identify key times to adjust your strategy. 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.
by
Investopedia Staff
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