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Golar LNG Limited and Other Transportation Stocks Making Big Moves on August 27, 2012
The morning has been good for the market. The Nasdaq has risen 0.5%; the S&P 500 has moved up 0.3%; 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.
Despite a good day for the overall market so far, the Transportation sector (IYT) is down 0.4% and its current biggest movers are:
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GasLog (NYSE:GLOG) has risen 3.5% to hit a current price of $11.23 per share. This morning, the company's volume is 228,285 shares. This is 1.9 times the current daily average. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. Understanding investment valuation ratios allows an investor to assess the true value of an individual stock. The price/book value ratio is calculated by dividing the current stock price by the company's book value per share. GLOG's P/B ratio of 1.16 shows that its share price is higher than its book value. This may be a sign that the company is overvalued. One problem with the P/B value ratio is that it can be difficult to calculate the true book value of a company, so investors should be aware that many measures of book value may provide only a rough estimate, and should be taken with a grain of salt. SEE: Investment Valuation Ratios: Price/Book Value Ratio
Spirit Airlines (Nasdaq:SAVE) has increased to a share price of $19.75, a 2.9% rise. So far today, the company's volume is 166,000 shares, with trading activity in keeping with yesterday's lighter than yesterday's volume of 365,628 shares. Volume indicates the level of interest that investors have in a company at its current price. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. There are generally two price/earnings ratios calculated: the first, called the trailing Price/Earnings ratio, is calculated using the previous years actual earnings; the second, called forward Price/Earnings ratio, is calculated using the next year's estimated earnings. The P/E ratio for SAVE is 12.8, below the industry average of 43.71. A low P/E might arise due to substantial inherent risk of the firm and its operations, poor return on equity, or improper valuation of the market. 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: Investment Valuation Ratios: Price/Earnings Ratio
After rising 2.5%, Hornbeck Offshore Services (NYSE:HOS) is currently trading at a share price of $40.46. So far today, 160,050 shares have changed hands. 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. 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. In a nutshell, the price/sales ratio shows how much Wall Street values every dollar of the company's sales. HOS' P/S ratio of 2.85 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.
After a decline of 2.2%, Atlas Air Worldwide Holdings (Nasdaq:AAWW) has hit a share price of $51.10. At 114,393 shares, the company's volume so far today is in keeping with its current three-month average. 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. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. The easy-to-calculate debt ratio is helpful to investors looking for a quick take on the leverage for a company. AAWW's debt ratio is 54.5%. 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.
Increasing 1.9%, Golar LNG (Nasdaq:GMLP) is trading at $31.15 per share. So far today, the company's volume is 29,480 shares. This is in keeping with its current daily average. In technical analysis, trading volume is used to determine the strength of a market indicator. Looking at a company's valuation ratios is a good way of getting a basic idea as to its value as an investment. 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. GMLP has a high capitalization ratio of 96%. A high capitalization ratio is not necessarily bad since higher financial leverage can increase the return on a shareholder's investment. Prudent use of leverage (debt) increases the financial resources available to a company for growth and expansion.
Con Way (NYSE:CNW) has fallen 1.9% and is currently trading at $29.75 per share. The company's volume is currently 209,693 shares for the day, which is likely to result in less activity than yesterday's volume of 741,575 shares. Volume is used to evaluate how meaningful the price movement of a stock is. Investment valuation ratios can be very useful in estimating whether a stock price is too high, reasonable or a bargain investment opportunity. One of the favorite tools of many value investors is analyzing price/book value ratios, as it provides a measure of the underlying value of a company's assets as compared to the valuation of its equity. CNW's stock is trading for more than its book value with a P/B ratio of 2.02. 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. 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: Using The Price-To-Book Ratio To Evaluate Companies
After an increase of 1.6%, Golar LNG Limited (Nasdaq:GLNG) has reached a current price of $41.78. So far today, the company's volume is 282,286 shares. A stock's volume conveys how excited investors are about it. 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. Price/earnings ratios (P/E ratios) provide a measure of the relative value of a stock. GLNG's P/E ratio of 66.4 is above the industry average of 6.77. A company with a high P/E ratio will eventually have to live up to the high rating by substantially increasing its earnings, or the price will need to drop. From the investor's perspective, a stock with a lower ratio is relatively cheaper than a stock with a higher ratio. SEE: Understanding The P/E Ratio
The Bottom Line No matter the economic climate, Wall Street will always have stocks that make major moves each week. Paying close attention to the previous ratios will help you identify key times to adjust your strategy. 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.
Despite a good day for the overall market so far, the Transportation sector (IYT) is down 0.4% and its current biggest movers are:
| Company | Market Cap | Percentage Change |
| GasLog (NYSE:GLOG) | $682.1 million | +3.5% |
| Spirit Airlines (Nasdaq:SAVE) | $1.39 billion | +2.9% |
| Hornbeck Offshore Services (NYSE:HOS) | $1.4 billion | +2.5% |
| Atlas Air Worldwide Holdings (Nasdaq:AAWW) | $1.38 billion | -2.2% |
| Golar LNG (Nasdaq:GMLP) | $706.8 million | +1.9% |
| Con Way (NYSE:CNW) | $1.7 billion | -1.9% |
| Golar LNG Limited (Nasdaq:GLNG) | $3.3 billion | +1.6% |
GasLog (NYSE:GLOG) has risen 3.5% to hit a current price of $11.23 per share. This morning, the company's volume is 228,285 shares. This is 1.9 times the current daily average. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. Understanding investment valuation ratios allows an investor to assess the true value of an individual stock. The price/book value ratio is calculated by dividing the current stock price by the company's book value per share. GLOG's P/B ratio of 1.16 shows that its share price is higher than its book value. This may be a sign that the company is overvalued. One problem with the P/B value ratio is that it can be difficult to calculate the true book value of a company, so investors should be aware that many measures of book value may provide only a rough estimate, and should be taken with a grain of salt. SEE: Investment Valuation Ratios: Price/Book Value Ratio
Spirit Airlines (Nasdaq:SAVE) has increased to a share price of $19.75, a 2.9% rise. So far today, the company's volume is 166,000 shares, with trading activity in keeping with yesterday's lighter than yesterday's volume of 365,628 shares. Volume indicates the level of interest that investors have in a company at its current price. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. There are generally two price/earnings ratios calculated: the first, called the trailing Price/Earnings ratio, is calculated using the previous years actual earnings; the second, called forward Price/Earnings ratio, is calculated using the next year's estimated earnings. The P/E ratio for SAVE is 12.8, below the industry average of 43.71. A low P/E might arise due to substantial inherent risk of the firm and its operations, poor return on equity, or improper valuation of the market. 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: Investment Valuation Ratios: Price/Earnings Ratio
After rising 2.5%, Hornbeck Offshore Services (NYSE:HOS) is currently trading at a share price of $40.46. So far today, 160,050 shares have changed hands. 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. 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. In a nutshell, the price/sales ratio shows how much Wall Street values every dollar of the company's sales. HOS' P/S ratio of 2.85 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.
Increasing 1.9%, Golar LNG (Nasdaq:GMLP) is trading at $31.15 per share. So far today, the company's volume is 29,480 shares. This is in keeping with its current daily average. In technical analysis, trading volume is used to determine the strength of a market indicator. Looking at a company's valuation ratios is a good way of getting a basic idea as to its value as an investment. 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. GMLP has a high capitalization ratio of 96%. A high capitalization ratio is not necessarily bad since higher financial leverage can increase the return on a shareholder's investment. Prudent use of leverage (debt) increases the financial resources available to a company for growth and expansion.
Con Way (NYSE:CNW) has fallen 1.9% and is currently trading at $29.75 per share. The company's volume is currently 209,693 shares for the day, which is likely to result in less activity than yesterday's volume of 741,575 shares. Volume is used to evaluate how meaningful the price movement of a stock is. Investment valuation ratios can be very useful in estimating whether a stock price is too high, reasonable or a bargain investment opportunity. One of the favorite tools of many value investors is analyzing price/book value ratios, as it provides a measure of the underlying value of a company's assets as compared to the valuation of its equity. CNW's stock is trading for more than its book value with a P/B ratio of 2.02. 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. 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: Using The Price-To-Book Ratio To Evaluate Companies
After an increase of 1.6%, Golar LNG Limited (Nasdaq:GLNG) has reached a current price of $41.78. So far today, the company's volume is 282,286 shares. A stock's volume conveys how excited investors are about it. 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. Price/earnings ratios (P/E ratios) provide a measure of the relative value of a stock. GLNG's P/E ratio of 66.4 is above the industry average of 6.77. A company with a high P/E ratio will eventually have to live up to the high rating by substantially increasing its earnings, or the price will need to drop. From the investor's perspective, a stock with a lower ratio is relatively cheaper than a stock with a higher ratio. SEE: Understanding The P/E Ratio
The Bottom Line No matter the economic climate, Wall Street will always have stocks that make major moves each week. Paying close attention to the previous ratios will help you identify key times to adjust your strategy. 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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