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Tickers in this Article: RLD, RUSHB, GIL, WPRT, OXM, KNM, MOV
After the morning's trading, the Nasdaq is down 0.2%, the S&P 500 is unchanged and the Dow has moved little. 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) has changed little on a quiet day for the overall market. These are the biggest movers in the sector currently:
CompanyMarket CapPercentage Change
RealD (NYSE:RLD)$570.7 million-8.7%
Rush Enterprises (Nasdaq:RUSHB)$619.5 million-4.1%
Gildan Activewear Inc (NYSE:GIL)$3.87 billion-3.8%
Westport Innovations Inc (Nasdaq:WPRT)$1.92 billion-2.3%
Oxford Industries (NYSE:OXM)$849 million+2.1%
KONAMI CORPORATION (NYSE:KNM)$3.22 billion+1.8%
Movado Group (NYSE:MOV)$889 million-1.8%
Broker Summary: E-Trade Financial

Falling 8.7%, RealD (NYSE:RLD) is currently at a share price of $9.52. The company's volume for the day so far is 966,812 shares. This is more trading activity than there was yesterday. Volume is an important indicator because it indicates how significant a price shift is. Understanding investment valuation ratios allows an investor to assess the true value of an individual stock. The price/book value ratio is especially important for value investors as it can provide an indication of the true value of a company's assets at a time when its business model may be failing. RLD's stock is trading for more than its book value with a P/B ratio of 2.56. 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. 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: Using The Price-To-Book Ratio To Evaluate Companies

Rush Enterprises (Nasdaq:RUSHB) is trading at $15.35 per share, down 4.1%. The company's volume is currently 7,102 shares for the day, 1.2 times the average daily volume. In technical analysis, trading volume is used to determine the strength of a market indicator.

Currently trading at $30.64 per share, Gildan Activewear Inc (NYSE:GIL) has fallen 3.8%. This morning, the company is trading a volume of 435,298 shares. Volume indicates the level of interest that investors have in a company at its current price. Valuation ratios allow the investor to make a quick determination as to a company's investment value. A company's price/earnings ratio (P/E ratio) provides a measure of how expensive or cheap a stock is. GIL's P/E ratio of 36.2 is above the industry average of 21.2. 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. 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

Slipping 2.3%, Westport Innovations Inc (Nasdaq:WPRT) is currently trading at $34.14 per share. With 227,592 shares changing hands so far today, the company's volume is 0.3 times the current three-month average. Price change alone is not enough to know how a stock is doing. Volume is an important secondary indicator used to confirm trends suggested by price movement. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. The easy-to-calculate debt ratio is helpful to investors looking for a quick take on the leverage for a company. WPRT has a debt ratio of 36%, which is fairly low. 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.

Oxford Industries (NYSE:OXM) has risen 2.1% to hit a current price of $52.42 per share. So far today, 142,412 shares of the company's stock have changed hands. If a stock price moves on high volume, this means that the change is a significant one. 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 is a measurement of how much suppliers, lenders, creditors and obligors have committed to the company versus what the shareholders have committed. The D/E ratio for OXM is 51%. 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.

After an increase of 1.8%, KONAMI CORPORATION (NYSE:KNM) has reached a current price of $24.05. So far today, the company's volume is 3,257 shares, 0.7 times its current daily average. A stock's volume conveys how excited investors are about it. Investment valuation ratios can be very useful in estimating whether a stock price is too high, reasonable or a bargain investment opportunity. 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. KNM has a fairly low capitalization ratio of 2.3%. Investors generally consider a company with low debt and high equity levels is a good quality investment. A low level of debt and a healthy proportion of equity in a company's capital structure is an indication of financial fitness.

Movado Group (NYSE:MOV) has decreased to $34.74 per share, a 1.8% fall. The company is currently trading a volume of 286,315 shares. If a stock price makes a big move up or down, volume lets us know the significance of that move. 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. 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. The dividend yield for MOV is 0.6%, which is on the low end. If you are an income investor, this stock may not be attractive to you. Just as with the yield on a bond or certificate of deposit, the higher the dividend yield, the higher the return to the investor. SEE: Investment Valuation Ratios: Dividend Yield

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. 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.

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