Free Annual Reports
Harley-Davidson and More Big Movers in Consumer Cyclical on October 3, 2012
The market is on the rise this morning. The Nasdaq has climbed 0.6%; the S&P 500 has risen 0.4%; and the Dow is up 0.3%. The consumer cyclical sector is a category of stocks that relies heavily on the business cycle and economic conditions. Consumer cyclicals include industries such as automotive, housing, entertainment and retail. The category can be further divided into durable and non-durable sections. Durable cyclicals include physical goods such as hardware or vehicles, while non-durables represent items like movies or hotel services. The performance of consumer cyclicals is highly related to the state of the economy. They represent goods and services that are not considered necessities, but luxurious purchases. During contractions or recessions, people have less disposable income to spend on consumer cyclicals. When the economy is expanding or booming, the sales of these goods rise as retail and leisure spending increase.
Outperforming the market overall, the Consumer Cyclical sector (XLY) is up 0.8% and its biggest movers so far today are:
Broker Summary: E-Trade Financial
Slipping 4.9%, Smith (Nasdaq:SWHC) is currently trading at $10.36 per share. The company's volume is currently 1.4 million shares for the day, 0.7 times the current three-month average. Volume is used to evaluate how meaningful the price movement of a stock is. 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. 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. SWHC's P/E ratio of 16.5 falls below the industry average of 36.89. Companies with low P/E ratios may find it easier to surprise the market to the upside, even if their financial performance is not as strong as that of companies with high P/E ratios. High P/E stocks could be "growth" stocks, while low PE stocks may be "value" stocks. SEE: How To Find P/E And PEG Ratios
After a decline of 4.2%, Sturm, Ruger (NYSE:RGR) has hit a share price of $46.61. The company's volume is currently 287,818 shares. In technical analysis, trading volume is used to determine the strength of a market indicator. 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. 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. RGR has a high P/S ratio of 1.9. In young companies, a high P/S ratio is a sign of sales growth that is expected to turn into earnings and cash flow. All things being equal, a low P/S ratio is good news for investors, while a very high one can be a warning sign.
Liz Claiborne (NYSE:FNP) has decreased to $10.88 per share, a 3.9% fall. The company's volume is currently two million shares for the day, 1.2 times the average daily volume. A stock's volume conveys how excited investors are about it. 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 easy-to-calculate debt ratio is helpful to investors looking for a quick take on the leverage for a company. FNP has a high debt ratio of 119.5%. 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.
After an increase of 3.6%, Deckers (Nasdaq:DECK) has reached a current price of $38.01. The company's volume for the day so far is 837,633 shares. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. The assumption with high price/earnings stocks (generally of the growth variety) is that investors are willing to buy at a high price because they believe that the stock has significant growth potential, and the price/earnings to growth (PEG) ratio helps investors determine the degree of reliability of that growth assumption. DECK's PEG ratio of 0.76 is in line with the industry average. Because of the adjustment for earnings growth rate, the PEG ratio is somewhat more useful than many formulas for comparing companies in different industries.
Harley-Davidson (NYSE:HOG) has fallen 2.8% and is currently trading at $40.92 per share. With 1.7 million shares changing hands so far today, the company's volume is 0.8 times its average over the past three months. Volume indicates the level of interest that investors have in a company at its current price. Understanding investment valuation ratios allows an investor to assess the true value of an individual stock. The price/book value ratio provides a way of evaluating whether a stock is relatively cheap or expensive. HOG's stock is trading for more than its book value with a P/B ratio of 3.5. 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. 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: How Buybacks Warps The Price-To-Book Ratio
Dunkin' Brands Group (Nasdaq:DNKN) has risen 2.5% to hit a current price of $29.67 per share. The company is trading at a volume of 700,196 shares. If a stock price makes a big move up or down, volume lets us know the significance of that move. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. A company's price/earnings ratio (P/E ratio) provides a measure of how expensive or cheap a stock is. DNKN's P/E ratio of 61.6 is above the industry average of 20.61. This could mean that the market is expecting big things over the next few months or years. 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: How To Use The P/E Ratio And PEG To Tell The Future Of A Stock
Increasing 2.3%, Gildan Activewear Inc (NYSE:GIL) is trading at $32.69 per share. The company's volume is currently 161,584 shares for the day, 0.7 times the 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. 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 price/sales ratio measures a company's stock market price by its revenues. The P/S ratio for GIL is 1.79, which is relatively high. 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.
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. Keep in mind that all these ratios should be compared against historical numbers and industry information in order to get a more complete picture.
Outperforming the market overall, the Consumer Cyclical sector (XLY) is up 0.8% and its biggest movers so far today are:
| Company | Market Cap | Percentage Change |
| Smith (Nasdaq:SWHC) | $713.3 million | -4.9% |
| Sturm, Ruger (NYSE:RGR) | $931.9 million | -4.2% |
| Liz Claiborne (NYSE:FNP) | $1.28 billion | -3.9% |
| Deckers (Nasdaq:DECK) | $1.36 billion | +3.6% |
| Harley-Davidson (NYSE:HOG) | $9.6 billion | -2.8% |
| Dunkin\' Brands Group (Nasdaq:DNKN) | $3.06 billion | +2.5% |
| Gildan Activewear Inc (NYSE:GIL) | $3.88 billion | +2.3% |
Slipping 4.9%, Smith (Nasdaq:SWHC) is currently trading at $10.36 per share. The company's volume is currently 1.4 million shares for the day, 0.7 times the current three-month average. Volume is used to evaluate how meaningful the price movement of a stock is. 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. 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. SWHC's P/E ratio of 16.5 falls below the industry average of 36.89. Companies with low P/E ratios may find it easier to surprise the market to the upside, even if their financial performance is not as strong as that of companies with high P/E ratios. High P/E stocks could be "growth" stocks, while low PE stocks may be "value" stocks. SEE: How To Find P/E And PEG Ratios
After a decline of 4.2%, Sturm, Ruger (NYSE:RGR) has hit a share price of $46.61. The company's volume is currently 287,818 shares. In technical analysis, trading volume is used to determine the strength of a market indicator. 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. 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. RGR has a high P/S ratio of 1.9. In young companies, a high P/S ratio is a sign of sales growth that is expected to turn into earnings and cash flow. All things being equal, a low P/S ratio is good news for investors, while a very high one can be a warning sign.
Liz Claiborne (NYSE:FNP) has decreased to $10.88 per share, a 3.9% fall. The company's volume is currently two million shares for the day, 1.2 times the average daily volume. A stock's volume conveys how excited investors are about it. 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 easy-to-calculate debt ratio is helpful to investors looking for a quick take on the leverage for a company. FNP has a high debt ratio of 119.5%. 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.
After an increase of 3.6%, Deckers (Nasdaq:DECK) has reached a current price of $38.01. The company's volume for the day so far is 837,633 shares. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. The assumption with high price/earnings stocks (generally of the growth variety) is that investors are willing to buy at a high price because they believe that the stock has significant growth potential, and the price/earnings to growth (PEG) ratio helps investors determine the degree of reliability of that growth assumption. DECK's PEG ratio of 0.76 is in line with the industry average. Because of the adjustment for earnings growth rate, the PEG ratio is somewhat more useful than many formulas for comparing companies in different industries.
Harley-Davidson (NYSE:HOG) has fallen 2.8% and is currently trading at $40.92 per share. With 1.7 million shares changing hands so far today, the company's volume is 0.8 times its average over the past three months. Volume indicates the level of interest that investors have in a company at its current price. Understanding investment valuation ratios allows an investor to assess the true value of an individual stock. The price/book value ratio provides a way of evaluating whether a stock is relatively cheap or expensive. HOG's stock is trading for more than its book value with a P/B ratio of 3.5. 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. 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: How Buybacks Warps The Price-To-Book Ratio
Dunkin' Brands Group (Nasdaq:DNKN) has risen 2.5% to hit a current price of $29.67 per share. The company is trading at a volume of 700,196 shares. If a stock price makes a big move up or down, volume lets us know the significance of that move. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. A company's price/earnings ratio (P/E ratio) provides a measure of how expensive or cheap a stock is. DNKN's P/E ratio of 61.6 is above the industry average of 20.61. This could mean that the market is expecting big things over the next few months or years. 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: How To Use The P/E Ratio And PEG To Tell The Future Of A Stock
Increasing 2.3%, Gildan Activewear Inc (NYSE:GIL) is trading at $32.69 per share. The company's volume is currently 161,584 shares for the day, 0.7 times the 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. 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 price/sales ratio measures a company's stock market price by its revenues. The P/S ratio for GIL is 1.79, which is relatively high. 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.
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. Keep in mind that all these ratios should be compared against historical numbers and industry information in order to get a more complete picture.
by
Investopedia Staff
Investopedia.com believes that individuals can excel at managing their financial affairs. As such, we strive to provide free educational content and tools to empower individual investors, including thousands of original and objective articles and tutorials on a wide variety of financial topics.
Free Annual Reports
