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Tickers in this Article: CEA, ARII, HOS, GLNG, SFL, CPA, FDX
The market is having a bad day so far: the Nasdaq has declined 0.1%; the S&P 500 is trading down 0.1%; and the Dow has slipped 0.1%. The transportation sector is a category of stocks relating to the transportation of goods or customers. It is made up of airlines, railroads and trucking companies. The performance of the transportation sector is sensitive to the price of oil. Because operations revolve around the use of vehicles, fuel prices represent a significant cost to transportation companies. As the price of oil rises, transportation companies will be expected to earn less. Inversely, these companies do well when the cost of fuel decreases.

The Transportation sector (IYT) is down 0.3%, underperforming the market overall. The current biggest movers in the sector are:
CompanyMarket CapPercentage Change
China Eastern Airlines Corp. Ltd (NYSE:CEA)$3.6 billion-2.6%
American Railcar Industries (Nasdaq:ARII)$621.4 million-1.9%
Hornbeck Offshore Services (NYSE:HOS)$1.43 billion-1.3%
Golar LNG Limited (Nasdaq:GLNG)$3.34 billion-1.3%
Ship Finance (NYSE:SFL)$1.25 billion+1.1%
Copa Holdings (NYSE:CPA)$3.44 billion+1%
FedEx (NYSE:FDX)$27.63 billion-0.9%
Forex Broker Summary: Forex Capital Markets (FXCM)

At $15.56, China Eastern Airlines Corp. Ltd (NYSE:CEA) has slipped 2.6%. With 2,162 shares changing hands so far today, the company's volume is 0.2 times 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. Investment valuation ratios can be very useful in estimating whether a stock price is too high, reasonable or a bargain investment opportunity. 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. The D/E ratio for CEA is 186%. Companies in capital-intensive industries usually have higher D/E ratios because they need to buy more property, plants, and equipment to operate. 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.

American Railcar Industries (Nasdaq:ARII) has fallen 1.9% and is currently trading at $28.54 per share. This morning, the company's volume is 23,530 shares. This is in line with its current daily average. High volume indicates a lot of investor interest while low volume indicates the opposite. While investment valuation ratios are useful tools in estimating the attractiveness of an investment, remember that it is important to look at a company's historical performance and compare the company ratios with its competitors and industry overall. A company's capitalization (not to be confused with its market capitalization) is the term used to describe the makeup of a company's permanent or long-term capital, which consists of both long-term debt and shareholders' equity. The capitalization ratio for ARII is 45.1%. 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.

Hornbeck Offshore Services (NYSE:HOS) is down 1.3% to reach $39.94 per share. The company's volume is currently 169,011 shares for the day, on pace to finish the day below yesterday's volume of 434,410 shares. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. 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. HOS has a P/B ratio of 1.29 which shows that its share price is higher than its book value. This may be a sign that the company is overvalued. P/B has its shortcomings but is still widely used as a valuation metric, more relevant for use by investors looking at capital-intensive or finance-related businesses, such as banks; book value does not carry much meaning for service-based firms with few tangible assets. SEE: Investment Valuation Ratios: Price/Book Value Ratio

Slipping 1.3%, Golar LNG Limited (Nasdaq:GLNG) is currently trading at $40.99 per share. So far today, the company's volume is 198,819 shares. If a stock price moves on high volume, this means that the change is a significant one. A company's investment value can be 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. A company's price/earnings ratio (P/E ratio) provides a measure of how expensive or cheap a stock is. Compared to the industry average of 6.77, GLNG's P/E ratio of 66.4 is quite high. Generally speaking, the higher the P/E ratio, the higher the market expectations for a company's future performance. A high or low P/E ratio is not good or bad in and of itself, but a company trading with a high P/E ratio must continue to post strong financial performance or its stock price is likely to fall. SEE: Can Investors Trust the P/E Ratio?

Ship Finance (NYSE:SFL) is at $15.96 per share after an increase of 1.1%. The company's volume for the day so far is 240,684 shares, 0.8 times its average over the past three months. 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. Dividend yield measures the income that a stock will generate for an investor. Dividend yield for SFL is 9.9%, which is fairly high. Companies with large dividends tend to cut them to preserve cash flow, so watch out that you don't end up with a stock that might not be worth owning. A higher dividend yield may indicate a risk of a fall in the price of the security, or a cut in the level of dividend payments, either of which would have the effect of dropping future returns. SEE: Investment Valuation Ratios: Dividend Yield

Copa Holdings (NYSE:CPA) has risen 1% to hit a current price of $78.49 per share. The company's volume for the morning is 59,338 shares. This is 0.2 times the average daily volume. 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. Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. The price/sales ratio is used for spotting recovery situations or for double-checking that a company's growth has not become overvalued. CPA has a high P/S ratio of 2.38. In young companies, a high P/S ratio is a sign of sales growth that is expected to turn into earnings and cash flow. A limitation of the P/S ratio is that the price component measures only stock market captialization, while sales are a function of the entire capital structure, potentially leading to wide differences between levered and unlevered companies.

After a decline of 0.9%, FedEx (NYSE:FDX) has hit a share price of $87.17. So far today, 698,134 shares have changed hands,. Volume is an important indicator because it indicates how significant a price 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. The debt ratio shows the proportion of assets that a company is financing through debt. FDX's debt ratio is 50.8%. 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 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. However, these fundamental metrics must be analyzed with historic data, industry information in addition to firm specific financial statements.

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