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Kansas City and More Big Movers in Transportation on September 26, 2012
It's been a bad day for the market after the morning's trading. The Nasdaq has slipped 1%; the S&P 500 has declined 0.5%; and the Dow is trading down 0.2%. 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 0.2%, outperforming the market overall. Currently, the biggest movers in the sector are:
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After a decline of 7%, American Railcar Industries (Nasdaq:ARII) has hit a share price of $28.70. At 108,938 shares, the company's volume so far today is 1.1 times the average daily volume. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. 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. 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. ARII's capitalization ratio is 45.1%. A low level of debt and a healthy proportion of equity in a company's capital structure is an indication of financial fitness.
Alaska Air Group (NYSE:ALK) is at $34.96 per share after an increase of 3.8%. So far today, the company's volume is 356,243 shares. High volume indicates a lot of investor interest while low volume indicates the opposite. 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 is calculated by dividing total liabilities by total assets. The debt ratio for ALK is 76.3%, which is relatively high. 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. 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.
Hornbeck Offshore Services (NYSE:HOS) has decreased to $36.02 per share, a 3.4% fall. At 241,591 shares, the company's volume so far today is 0.3 times the current three-month average. Volume is an important indicator because it indicates how significant a price shift is. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. The price/book value ratio is calculated by dividing the current stock price by the company's book value per share. HOS has a P/B ratio of 1.17 which shows that its share price is higher than its book value. This implies that investors expect management to create more value from a given set of assets and/or that the market value of the firm's assets is significantly higher than their accounting value. 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
Genesee & Wyoming (NYSE:GWR) has risen 2.3% to hit a current price of $66.19 per share. The company's volume for the day so far is 682,106 shares. Yesterday, volume was only 439,174 shares. If a stock price makes a big move up or down, volume lets us know the significance of that move. Looking at a company's valuation ratios is a good way of getting a basic idea as to its value as an investment. 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. GWR's P/S ratio of 3.42 is on the high side. This could be a good sign if the share price increases. All things being equal, a low P/S ratio is good news for investors, while a very high one can be a warning sign.
After rising 2.2%, J.B. Hunt Transport Services (Nasdaq:JBHT) is currently trading at a share price of $52.32. So far today, the company's volume is 529,672 shares, consistent with its current daily average. Volume is used to evaluate how meaningful the price movement of a stock is. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. A simple P/E ratio can reveal the stock's real market value and show how the valuation compares to its industry group or a benchmark like the S&P 500 Index. JBHT's P/E ratio of 21.4 is above the industry average of 4.04. 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: Understanding The P/E Ratio
Golar LNG Limited (Nasdaq:GLNG) has fallen 2.1% and is currently trading at $37.64 per share. So far today, 176,661 shares have changed hands. A stock's volume conveys how excited investors are about it. Valuation ratios allow the investor to make a quick determination as to a company's investment value. 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. GLNG's D/E ratio of 196% is on the high side. Companies in capital-intensive industries usually have higher D/E ratios because they need to buy more property, plants, and equipment to operate. The D/E ratio is not a pure measurement of a company's debt because it includes operational liabilities in total liabilities.
Slipping 1.7%, Kansas City (NYSE:KSU) is currently trading at $75.09 per share. The company's volume for the day so far is 144,434 shares, 0.1 times its current three-month average. In technical analysis, trading volume is used to determine the strength of a market indicator. 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. 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 KSU is 34.8%. 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.
The Bottom Line On any given day, a particular stock may see positive or negative change in its share price. It is important to weigh current activity against historical performance when making any investment decisions. 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 Transportation sector (IYT) is down 0.2%, outperforming the market overall. Currently, the biggest movers in the sector are:
| Company | Market Cap | Percentage Change |
| American Railcar Industries (Nasdaq:ARII) | $658.9 million | -7% |
| Alaska Air Group (NYSE:ALK) | $2.37 billion | +3.8% |
| Hornbeck Offshore Services (NYSE:HOS) | $1.32 billion | -3.4% |
| Genesee & Wyoming (NYSE:GWR) | $2.65 billion | +2.3% |
| J.B. Hunt Transport Services (Nasdaq:JBHT) | $6.02 billion | +2.2% |
| Golar LNG Limited (Nasdaq:GLNG) | $3.09 billion | -2.1% |
| Kansas City (NYSE:KSU) | $8.4 billion | -1.7% |
After a decline of 7%, American Railcar Industries (Nasdaq:ARII) has hit a share price of $28.70. At 108,938 shares, the company's volume so far today is 1.1 times the average daily volume. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. 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. 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. ARII's capitalization ratio is 45.1%. A low level of debt and a healthy proportion of equity in a company's capital structure is an indication of financial fitness.
Alaska Air Group (NYSE:ALK) is at $34.96 per share after an increase of 3.8%. So far today, the company's volume is 356,243 shares. High volume indicates a lot of investor interest while low volume indicates the opposite. 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 is calculated by dividing total liabilities by total assets. The debt ratio for ALK is 76.3%, which is relatively high. 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. 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.
Hornbeck Offshore Services (NYSE:HOS) has decreased to $36.02 per share, a 3.4% fall. At 241,591 shares, the company's volume so far today is 0.3 times the current three-month average. Volume is an important indicator because it indicates how significant a price shift is. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. The price/book value ratio is calculated by dividing the current stock price by the company's book value per share. HOS has a P/B ratio of 1.17 which shows that its share price is higher than its book value. This implies that investors expect management to create more value from a given set of assets and/or that the market value of the firm's assets is significantly higher than their accounting value. 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
After rising 2.2%, J.B. Hunt Transport Services (Nasdaq:JBHT) is currently trading at a share price of $52.32. So far today, the company's volume is 529,672 shares, consistent with its current daily average. Volume is used to evaluate how meaningful the price movement of a stock is. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. A simple P/E ratio can reveal the stock's real market value and show how the valuation compares to its industry group or a benchmark like the S&P 500 Index. JBHT's P/E ratio of 21.4 is above the industry average of 4.04. 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: Understanding The P/E Ratio
Golar LNG Limited (Nasdaq:GLNG) has fallen 2.1% and is currently trading at $37.64 per share. So far today, 176,661 shares have changed hands. A stock's volume conveys how excited investors are about it. Valuation ratios allow the investor to make a quick determination as to a company's investment value. 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. GLNG's D/E ratio of 196% is on the high side. Companies in capital-intensive industries usually have higher D/E ratios because they need to buy more property, plants, and equipment to operate. The D/E ratio is not a pure measurement of a company's debt because it includes operational liabilities in total liabilities.
Slipping 1.7%, Kansas City (NYSE:KSU) is currently trading at $75.09 per share. The company's volume for the day so far is 144,434 shares, 0.1 times its current three-month average. In technical analysis, trading volume is used to determine the strength of a market indicator. 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. 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 KSU is 34.8%. 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.
The Bottom Line On any given day, a particular stock may see positive or negative change in its share price. It is important to weigh current activity against historical performance when making any investment decisions. 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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