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CRH PLC (ADR) and More Big Movers in Capital Goods Today
The morning has been good for the market. The Nasdaq has risen 0.6%; the S&P 500 has climbed 0.3%; and the Dow has moved up 0.3%. 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.
Underperforming the market overall, the Capital Goods sector (XLI) is up 0.1%, and these are its current biggest movers:
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Falling 5.5%, CRH PLC (NYSE:CRH) is currently at a share price of $18.20. The company's volume for the day so far is 3.2 million shares. This is more trading activity than there was yesterday. 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 debt-equity (D/E) ratio is a leverage ratio. CRH has a debt-equity ratio of 47%, which is on the low side. Companies with low D/E ratios are more attractive to investors because they are better able to protect their business interests in times of decline. The D/E ratio percentage provides a much more dramatic perspective on a company's leverage position than the debt ratio percentage.
After an increase of 3.3%, Fortune Brands Home & Security (NYSE:FBHS) has reached a current price of $23.40. The company's volume is currently 611,025 shares for the day, 0.9 times the average daily volume. The trading volume for a stock indicates the level of investor interest. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. 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. FBHS' P/B ratio of 1.67 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: Using The Price-To-Book Ratio To Evaluate Companies
Kennametal (NYSE:KMT) has decreased to $36 per share, a 2.5% fall. The company's volume for the day so far is 816,848 shares. High volume indicates a lot of investor interest while low volume indicates the opposite. 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). PEG ratio for KMT is consistent with the industry average at 0.71. Because of the adjustment for earnings growth rate, the PEG ratio is somewhat more useful than many formulas for comparing companies in different industries.
After rising 2.4%, Zebra (Nasdaq:ZBRA) is currently trading at a share price of $35.86. With 85,425 shares changing hands so far today, the company's volume is consistent with its current three-month average. Volume is used to evaluate how meaningful the price movement of a stock is. Understanding investment valuation ratios allows an investor to assess the true value of an individual stock. While measuring a price/earnings ratio (P/E ratio) is a popular valuation technique, the measure cannot be calculated for companies without earnings, so some investors analyze the price/sales ratio. ZBRA's P/S ratio of 1.79 is on the high side. 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.
Titan Machinery (Nasdaq:TITN) is trading at $27.83 per share, down 2.4%. So far today, the company's volume is 125,244 shares. This is about the same trading activity as there was yesterday. If a stock price makes a big move up or down, volume lets us know the significance of that move. 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 ratio shows the proportion of assets that a company is financing through debt. TITN has a high debt ratio of 70.2%. This means that most of the company's assets are financed through debt. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.
Increasing 2.2%, Lennox International (NYSE:LII) is trading at $46.07 per share. The company's volume is currently 152,148 shares for the day, 0.3 times the current daily average. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. For investors primarily interested in the income a stock can generate, the dividend yield is an important determinant of how attractive a stock is. LII has a low dividend yield of 1.6%. A company with a low dividend yield may be a safer investment in the long run. 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: Due Diligence On Dividends
James Hardie Industries SE (NYSE:JHX) is currently trading at a share price of $40.50, a 1.9% decline. So far today, 3,962 shares have changed hands. 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. 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-equity (D/E) ratio compares the total liabilities for a company to its total shareholder equity. JHX has a low debt-equity ratio of 24%. A low D/E ratio may be a sign that the company is not taking advantage of leverage to increase its profits. 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.
The Bottom Line On any given day, a particular stock may see positive or negative change in its share price. Paying close attention to the previous ratios will help you identify key times to adjust your strategy. However, these fundamental metrics must be analyzed with historic data, industry information in addition to firm specific financial statements.
Underperforming the market overall, the Capital Goods sector (XLI) is up 0.1%, and these are its current biggest movers:
| Company | Market Cap | Percentage Change |
| CRH PLC (ADR) (NYSE:CRH) | $13.66 billion | -5.5% |
| Fortune Brands Home & Security Inc (NYSE:FBHS) | $3.64 billion | +3.3% |
| Kennametal Inc. (NYSE:KMT) | $2.96 billion | -2.5% |
| Zebra Technologies Corp. (Nasdaq:ZBRA) | $1.81 billion | +2.4% |
| Titan Machinery Inc. (Nasdaq:TITN) | $597 million | -2.4% |
| Lennox International Inc. (NYSE:LII) | $2.3 billion | +2.2% |
| James Hardie Industries SE (ADR) (NYSE:JHX) | $3.62 billion | -1.9% |
Falling 5.5%, CRH PLC (NYSE:CRH) is currently at a share price of $18.20. The company's volume for the day so far is 3.2 million shares. This is more trading activity than there was yesterday. 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 debt-equity (D/E) ratio is a leverage ratio. CRH has a debt-equity ratio of 47%, which is on the low side. Companies with low D/E ratios are more attractive to investors because they are better able to protect their business interests in times of decline. The D/E ratio percentage provides a much more dramatic perspective on a company's leverage position than the debt ratio percentage.
After an increase of 3.3%, Fortune Brands Home & Security (NYSE:FBHS) has reached a current price of $23.40. The company's volume is currently 611,025 shares for the day, 0.9 times the average daily volume. The trading volume for a stock indicates the level of investor interest. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. 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. FBHS' P/B ratio of 1.67 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: Using The Price-To-Book Ratio To Evaluate Companies
Kennametal (NYSE:KMT) has decreased to $36 per share, a 2.5% fall. The company's volume for the day so far is 816,848 shares. High volume indicates a lot of investor interest while low volume indicates the opposite. 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). PEG ratio for KMT is consistent with the industry average at 0.71. Because of the adjustment for earnings growth rate, the PEG ratio is somewhat more useful than many formulas for comparing companies in different industries.
Titan Machinery (Nasdaq:TITN) is trading at $27.83 per share, down 2.4%. So far today, the company's volume is 125,244 shares. This is about the same trading activity as there was yesterday. If a stock price makes a big move up or down, volume lets us know the significance of that move. 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 ratio shows the proportion of assets that a company is financing through debt. TITN has a high debt ratio of 70.2%. This means that most of the company's assets are financed through debt. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.
Increasing 2.2%, Lennox International (NYSE:LII) is trading at $46.07 per share. The company's volume is currently 152,148 shares for the day, 0.3 times the current daily average. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. For investors primarily interested in the income a stock can generate, the dividend yield is an important determinant of how attractive a stock is. LII has a low dividend yield of 1.6%. A company with a low dividend yield may be a safer investment in the long run. 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: Due Diligence On Dividends
James Hardie Industries SE (NYSE:JHX) is currently trading at a share price of $40.50, a 1.9% decline. So far today, 3,962 shares have changed hands. 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. 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-equity (D/E) ratio compares the total liabilities for a company to its total shareholder equity. JHX has a low debt-equity ratio of 24%. A low D/E ratio may be a sign that the company is not taking advantage of leverage to increase its profits. 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.
The Bottom Line On any given day, a particular stock may see positive or negative change in its share price. Paying close attention to the previous ratios will help you identify key times to adjust your strategy. 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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