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Tickers in this Article: LCC, UAL, HII, PAC, WAB, KSU, JBHT
On a good day for the market, the Nasdaq has risen 0.6%, the S&P 500 is up 0.4% and the Dow has moved up 0.3%. 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 up 1%, outperforming the market overall. The biggest movers in the sector so far are:
CompanyMarket CapPercentage Change
US Airways (NYSE:LCC)$1.77 billion+7.6%
United Continental Holdings (NYSE:UAL)$6.63 billion+5.3%
Huntington Ingalls Industries (NYSE:HII)$2.12 billion-4.2%
Grupo Aeroportuario del Pacifico (NYSE:PAC)$2.43 billion-2.7%
Westinghouse Air Brake (NYSE:WAB)$3.9 billion+2.3%
Kansas City (NYSE:KSU)$8.29 billion-2.1%
J.B. Hunt Transport Services (Nasdaq:JBHT)$6.13 billion+1.7%
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US Airways (NYSE:LCC) is currently trading at $11.71 per share, a 7.6% increase. The company is trading at a volume of six million shares. This is greater than yesterday's volume of 4.7 million shares. If a stock is trading on low volume, then there is not much interest in the stock. On the other hand, if a stock is trading on high volume, then there is a lot of interest in the stock. Valuation ratios like 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 are useful in determining how attractive a potential or existing investment is. The price/earnings to growth (PEG) ratio is calculated by dividing the price/earnings ratio by growth in earnings-per-share; the lower the PEG ratio, the more reasonably valued the security. LCC's PEG ratio is 0.06. Because of the adjustment for earnings growth rate, the PEG ratio is somewhat more useful than many formulas for comparing companies in different industries.

United Continental Holdings (NYSE:UAL) has moved up 5.3% and is currently trading at $20.99 per share. At 2.9 million shares, the company's volume so far today is 0.8 times its current daily average. 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 is one of the more common methods of determining whether a stock is fairly valued. UAL's P/B ratio of 4.27 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. To put things in perspective, should be made among companies in the same industry rather than across industries. SEE: How Buybacks Warps The Price-To-Book Ratio

At $40.94, Huntington Ingalls Industries (NYSE:HII) has slipped 4.2%. So far today, 489,629 shares have changed hands. 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. Valuation ratios allow the investor to make a quick determination as to a company's investment value. A price/sales ratio is derived by dividing stock market price by company sales. HII has a P/S ratio of 0.3, on the low end. Low P/S ratios are more attractive than high ratios because this indicates that an investor is paying less for each dollar of sales. 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.

Grupo Aeroportuario del Pacifico (NYSE:PAC) is currently trading at a share price of $42.15, a 2.7% decline. With 14,378 shares changing hands so far today, the company's volume is 0.1 times the average volume over the last three months. High volume indicates a lot of investor interest while low volume indicates the opposite. Looking at a company's valuation ratios is a good way of getting a basic idea as to its value as an investment. The debt ratio is calculated by dividing total liabilities by total assets. PAC's debt ratio of 10.4% is on the low side. In other words, the company is less sensitive to changes in business or interest rates since less of its cash flow is dedicated to paying off loan expenses. 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.

Westinghouse Air Brake (NYSE:WAB) is at $83.26 per share after an increase of 2.3%. So far today, the company's volume is 183,846 shares. This is on pace to reach yesterday's trading volume of 400,158 shares. If a stock price makes a big move up or down, volume lets us know the significance of that move. 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 dividend yield is calculated by dividing a company's dividends per share by its stock price. WAB has a low dividend yield of 0.2%. If you are an income investor, this stock may not be attractive to you. 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

Currently trading at $73.73 per share, Kansas City (NYSE:KSU) has fallen 2.1%. The company's volume is currently 704,730 shares for the day, 0.7 times the average daily volume. The trading volume for a stock indicates the level of investor interest. 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. When used consistently and uniformly, the price/earnings to growth (PEG) ratio is an essential tool that adds dimension to the price/earnings ratio, allows comparisons across diverse industries and is always on the lookout for value. KSU has a PEG ratio of 1.41, which is consistent with the industry average. While P/E ratios are important indicators of market value, a high P/E in and of itself is not bad because it may indicate a company whose earnings are growing very rapidly, so many investors look at the PEG ratio in order to get an idea of whether or not a particular P/E ratio is justified by underlying earnings growth.

J.B. Hunt Transport Services (Nasdaq:JBHT) is up 1.7% to reach a current price of $53 per share. The company is currently trading a volume of 297,664 shares. 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. If the price/book value ratio of a stock is high, it may indicate that the stock is expensive, while a lower ratio may indicate that the stock is a bargain. JBHT has a P/B ratio of 8.73 which shows that its share price is higher than its book value. It is important to take the company's debt into account when using the P/B ratio as debt can boost a company's liabilities to the point where they wipe out much of the book value of its hard assets, creating artificially high P/B values. All else being equal, a stock with a low P/B value ratio is more attractive than a stock with a high ratio. SEE: Investment Valuation Ratios: Price/Book Value Ratio

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.

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