Currently, the Nasdaq has risen 0.1%, the S&P 500 is unchanged and the Dow has increased 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 trading up 1% overall, and these are the biggest movers in the sector so far:
|Company||Market Cap||Percentage Change|
|GulfMark Offshore (NYSE:GLF)||$955.7 million||-3.5%|
|Hornbeck Offshore Services (NYSE:HOS)||$1.43 billion||-3.4%|
|Atlas Air Worldwide Holdings (Nasdaq:AAWW)||$1.48 billion||-3%|
|Guangshen Railway Co. Ltd (NYSE:GSH)||$2 billion||+2%|
|FedEx (NYSE:FDX)||$28.03 billion||-2%|
|China Eastern Airlines Corp. Ltd (NYSE:CEA)||$3.4 billion||+1.7%|
|Norfolk Southern (NYSE:NSC)||$23.72 billion||-1.6%|
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GulfMark Offshore (NYSE:GLF) is currently trading at a share price of $34.24, a 3.5% decline. This morning, the company is trading a volume of 46,594 shares. This is 0.2 times the average volume over the last three months. In technical analysis, trading volume is used to determine the strength of a market indicator. 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. GLF has a high P/S ratio of 2.32. This could be a good sign if the share price increases. It is important to compare P/S ratios for companies in the same industry, as ratios can vary quite widely for companies in different industries.
Falling 3.4%, Hornbeck Offshore Services (NYSE:HOS) is currently at a share price of $39. The company's volume is currently 290,530 shares for the day, consistent with its current daily 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. 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. The price/earnings ratio is calculated by taking a stock price and dividing it by the earnings-per-share (EPS). HOS has a P/E ratio of 39.6, high compared to the industry average of 13.68. 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. A high P/E ratio indicates a stock that is expensive, while a low P/E ratio indicates a stock that is cheap. SEE: The P/E Ratio: A Good Market-Timing Indicator
Slipping 3%, Atlas Air Worldwide Holdings (Nasdaq:AAWW) is currently trading at $54.43 per share. This morning, the company is trading a volume of 55,466 shares. A stock's volume conveys how excited investors are about it. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. The debt-equity (D/E) ratio is a leverage ratio. AAWW has a D/E ratio of 76%. The D/E ratio is not a pure measurement of a company's debt because it includes operational liabilities in total liabilities.
Guangshen Railway Co. Ltd (NYSE:GSH) has moved up 2% and is currently trading at $14.99 per share. This morning, 16,028 shares have been traded, consistent with the volume from yesterday. The trading volume for a stock indicates the level of investor interest. 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. 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. GSH has a low capitalization ratio of 12.1%. Low leverage is a significant balance sheet strength, a sign of a less risky investment. A low level of debt and a healthy proportion of equity in a company's capital structure is an indication of financial fitness.
FedEx (NYSE:FDX) has decreased to $87.48 per share, a 2% fall. The company's volume for the day so far is 2.7 million shares. This is 1.1 times its current three-month average. 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. A company's value as an investment is more easily 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. The debt ratio shows the proportion of assets that a company is financing through debt. FDX has a debt ratio of 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.
China Eastern Airlines Corp. Ltd (NYSE:CEA) is currently trading at $15.34 per share, a 1.7% increase. So far today, the company's volume is 1,420 shares, 0.1 times its current daily average. If a stock price moves on high volume, this means that the change is a significant one. 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 price/book value ratio is one of the more common methods of determining whether a stock is fairly valued. The P/B ratio for CEA is 1.03, indicating that the stock is trading for more than its book value. This may be a sign that the company is overvalued. 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
Norfolk Southern (NYSE:NSC) has fallen 1.6% and is currently trading at $73.01 per share. So far today, 685,553 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 dividend yield is measured by taking the annual dividends per share and dividing that number by the stock price. Dividend yield for NSC is 2.7%. For income-oriented investors such as retirees, a stock with a high dividend yield may be more attractive than a stock with a low dividend yield. SEE: Dividend Yield For The Downturn
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.