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Tickers in this Article: CLC, MLHR, WPRT, TPX, BWA, DECK, FOSL
The market is having a bad day so far. The Nasdaq has fallen 0.3%; the S&P 500 has slipped 0.3%; and the Dow has declined 0.1%. 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 currently lagging behind the overall market, down 0.4%, and its current biggest movers are:
CompanyMarket CapPercentage Change
CLARCOR (NYSE:CLC)$2.47 billion-9%
Herman Miller (Nasdaq:MLHR)$1.19 billion-8.4%
Westport Innovations Inc (Nasdaq:WPRT)$1.65 billion-4.7%
Tempur-Pedic International (NYSE:TPX)$1.95 billion-4%
BorgWarner (NYSE:BWA)$8.66 billion-3.8%
Deckers (Nasdaq:DECK)$1.63 billion-3.4%
Fossil (Nasdaq:FOSL)$5.49 billion-3.3%
Broker Summary: TD Ameritrade Thinkorswim

Currently trading at $45.12 per share, CLARCOR (NYSE:CLC) has fallen 9%. So far today, 457,216 shares have changed hands. 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. Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. The debt-equity (D/E) ratio is a leverage ratio. CLC's debt-equity ratio of 2% is on the low end. This shows that the company's assets are financed primarily through equity. The D/E ratio percentage provides a much more dramatic perspective on a company's leverage position than the debt ratio percentage.

Herman Miller (Nasdaq:MLHR) has decreased to $18.61 per share, a 8.4% fall. The company's volume for the day so far is 394,869 shares, 1.6 times the current three-month average. The trading volume for a stock indicates the level of investor interest. Valuation ratios allow the investor to make a quick determination as to a company's investment value. 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. MLHR has a P/B ratio of 4.38 which shows that its share price is higher than its book value. This high share price relative to asset value is likely to indicate that the company has been earning a very high return on its assets. To put things in perspective, should be made among companies in the same industry rather than across industries. SEE: How Buybacks Warps The Price-To-Book Ratio

Slipping 4.7%, Westport Innovations Inc (Nasdaq:WPRT) is currently trading at $28.00 per share. The company is trading at a volume of 1.7 million shares. This is more trading activity than there was yesterday. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. 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. WPRT's debt ratio of 36% is on the low side. This indicates that the company engages in conservative financing with opportunities to borrow in the future at no significant risk. 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.

Tempur-Pedic International (NYSE:TPX) is down 4% to reach $31.27 per share. At 418,422 shares, the company's volume so far today is 0.4 times the current daily average. If a stock price makes a big move up or down, volume lets us know the significance of that move. 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. TPX's P/S ratio of 1.02 is on the high side. This could be a good sign if the share price increases. 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.

BorgWarner (NYSE:BWA) is trading at $73.18 per share, down 3.8%. The company is currently trading a volume of 867,936 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. 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 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. BWA has a fairly low capitalization ratio of 25%. 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.

Deckers (Nasdaq:DECK) has fallen 3.4% and is currently trading at $39.89 per share. So far today, the company's volume is 1.3 million shares, 0.7 times its average over the past 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. Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. 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 getting a good value when purchasing a stock with a high price/earnings ratio (P/E ratio). DECK has a PEG ratio of 0.85, which is consistent with the industry average. Because of the adjustment for earnings growth rate, the PEG ratio is somewhat more useful than many formulas for comparing companies in different industries.

Currently trading at $88.74 per share, Fossil (Nasdaq:FOSL) has fallen 3.3%. The company's volume is currently 295,312 shares. This is on pace to reach yesterday's trading volume of 692,379 shares. Volume is an important indicator because it indicates how significant a price shift is. Valuation ratios allow the investor to make a quick determination as to a company's investment value. The price/book value ratio provides a way of evaluating whether a stock is relatively cheap or expensive. The P/B ratio for FOSL is 4.77, indicating that the stock is trading for more 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. 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: Using The Price-To-Book Ratio To Evaluate Companies

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. Keep in mind that all these ratios should be compared against historical numbers and industry information in order to get a more complete picture.

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