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Fastenal Among Capital Goods' Biggest Movers on September 5, 2012
The market is doing well so far today. The Nasdaq is up 0.2%; the S&P 500 has risen 0.2%; and the Dow has climbed 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.
The biggest movers in an essentially flat Capital Goods (XLI) sector are:
Forex Broker Summary: Forex Capital Markets (FXCM)
Terex (NYSE:TEX) has fallen 4.2% and is currently trading at $20.97 per share. So far today, 1.5 million shares have changed hands. Volume indicates the level of interest that investors have in a company at its current price. 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 ratio is calculated by dividing total liabilities by total assets. TEX has a high debt ratio of 71.9%. 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.
Valmont Industries (NYSE:VMI) has risen 2.1% to hit a current price of $132.07 per share. The company's volume is currently 49,706 shares for the day, consistent with its current three-month average. When a stock price moves up or down, watching the volume is a good way of identifying how significant that shift is. Valuation ratios include 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. To a large degree, the debt-equity (D/E) ratio provides another vantage point on a company's leverage position, in this case, comparing total liabilities to shareholders' equity, as opposed to total assets in the debt ratio. VMI has a low debt-equity ratio of 38%. 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.
Increasing 1.9%, Colfax (NYSE:CFX) is trading at $33.81 per share. So far today, 236,159 shares of the company's stock have changed hands. This is about the same trading activity as there was yesterday. 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. Valuation ratios allow the investor to make a quick determination as to a company's investment value. 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. The capitalization ratio for CFX is 46.8%. This ratio is considered to be one of the more meaningful of the "debt" ratios - it delivers the key insight into the use of leverage by a company.
Falling 1.8%, Texas Industries (NYSE:TXI) is currently at a share price of $38.40. The company's volume is currently 69,274 shares for the day, 0.4 times the current daily average. Volume is used to evaluate how meaningful the price movement of a stock is. 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. The price/book value ratio provides a way of evaluating whether a stock is relatively cheap or expensive. TXI has a P/B ratio of 1.54 which 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: Using The Price-To-Book Ratio To Evaluate Companies
Fastenal (Nasdaq:FAST) is trading at $42.58 per share, down 1.8%. The company's volume for the day so far is 649,290 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. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. Dividend yield measures the income that a stock will generate for an investor. FAST has a dividend yield of 1.8%, which is fairly low. A company with a low dividend yield may be a safer investment in the long run. A stock's dividend yield depends on the nature of a company's business, its posture in the marketplace (value or growth oriented), its earnings and cash flow, and its dividend policy. SEE: Dividend Yield For The Downturn
Lindsay (NYSE:LNN) has moved up 1.8% and is currently trading at $67.66 per share. So far today, the company's volume is 60,362 shares, 0.3 times the current three-month average. 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. 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. LNN's P/S ratio of 1.31 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.
Slipping 1.7%, SPX (NYSE:SPW) is currently trading at $63.03 per share. The company's volume for the day so far is 125,130 shares. This is a sign that there will be less trading activity than there was yesterday. 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. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. The debt ratio measures the leverage of a company, and a company's leverage is a good way to assess risk. SPW's debt ratio of 70.5% is fairly high. This might mean that the company now has low borrowing capacity, which reduces it's financial flexibility. 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.
The Bottom Line No matter the economic climate, Wall Street will always have stocks that make major moves each week. Daily stock performance should be weighed against historical performance and put in context of the market overall. 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 biggest movers in an essentially flat Capital Goods (XLI) sector are:
| Company | Market Cap | Percentage Change |
| Terex (NYSE:TEX) | $2.42 billion | -4.2% |
| Valmont Industries (NYSE:VMI) | $3.44 billion | +2.1% |
| Colfax (NYSE:CFX) | $3.11 billion | +1.9% |
| Texas Industries (NYSE:TXI) | $1.1 billion | -1.8% |
| Fastenal (Nasdaq:FAST) | $12.84 billion | -1.8% |
| Lindsay (NYSE:LNN) | $845 million | +1.8% |
| SPX (NYSE:SPW) | $3.25 billion | -1.7% |
Terex (NYSE:TEX) has fallen 4.2% and is currently trading at $20.97 per share. So far today, 1.5 million shares have changed hands. Volume indicates the level of interest that investors have in a company at its current price. 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 ratio is calculated by dividing total liabilities by total assets. TEX has a high debt ratio of 71.9%. 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.
Valmont Industries (NYSE:VMI) has risen 2.1% to hit a current price of $132.07 per share. The company's volume is currently 49,706 shares for the day, consistent with its current three-month average. When a stock price moves up or down, watching the volume is a good way of identifying how significant that shift is. Valuation ratios include 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. To a large degree, the debt-equity (D/E) ratio provides another vantage point on a company's leverage position, in this case, comparing total liabilities to shareholders' equity, as opposed to total assets in the debt ratio. VMI has a low debt-equity ratio of 38%. 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.
Increasing 1.9%, Colfax (NYSE:CFX) is trading at $33.81 per share. So far today, 236,159 shares of the company's stock have changed hands. This is about the same trading activity as there was yesterday. 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. Valuation ratios allow the investor to make a quick determination as to a company's investment value. 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. The capitalization ratio for CFX is 46.8%. This ratio is considered to be one of the more meaningful of the "debt" ratios - it delivers the key insight into the use of leverage by a company.
Falling 1.8%, Texas Industries (NYSE:TXI) is currently at a share price of $38.40. The company's volume is currently 69,274 shares for the day, 0.4 times the current daily average. Volume is used to evaluate how meaningful the price movement of a stock is. 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. The price/book value ratio provides a way of evaluating whether a stock is relatively cheap or expensive. TXI has a P/B ratio of 1.54 which 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: Using The Price-To-Book Ratio To Evaluate Companies
Fastenal (Nasdaq:FAST) is trading at $42.58 per share, down 1.8%. The company's volume for the day so far is 649,290 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. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. Dividend yield measures the income that a stock will generate for an investor. FAST has a dividend yield of 1.8%, which is fairly low. A company with a low dividend yield may be a safer investment in the long run. A stock's dividend yield depends on the nature of a company's business, its posture in the marketplace (value or growth oriented), its earnings and cash flow, and its dividend policy. SEE: Dividend Yield For The Downturn
Lindsay (NYSE:LNN) has moved up 1.8% and is currently trading at $67.66 per share. So far today, the company's volume is 60,362 shares, 0.3 times the current three-month average. 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. 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. LNN's P/S ratio of 1.31 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.
Slipping 1.7%, SPX (NYSE:SPW) is currently trading at $63.03 per share. The company's volume for the day so far is 125,130 shares. This is a sign that there will be less trading activity than there was yesterday. 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. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. The debt ratio measures the leverage of a company, and a company's leverage is a good way to assess risk. SPW's debt ratio of 70.5% is fairly high. This might mean that the company now has low borrowing capacity, which reduces it's financial flexibility. 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.
The Bottom Line No matter the economic climate, Wall Street will always have stocks that make major moves each week. Daily stock performance should be weighed against historical performance and put in context of the market overall. 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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