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Tickers in this Article: ZNH, LFL, GMT, HOS, NMM, CKH, CPA
The Nasdaq has fallen 0.2%, the S&P 500 has remained steady and the Dow has moved little after the morning's trading. 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.

On a quiet day for the market overall so far, the Transportation sector (IYT) has slipped 0.2% and its biggest movers are currently:
CompanyMarket CapPercentage Change
China Southern Airlines Limited (NYSE:ZNH)$4.39 billion-2.1%
Lan Airlines S.A (NYSE:LFL)$8.18 billion-1.7%
GATX (NYSE:GMT)$1.97 billion-1.3%
Hornbeck Offshore Services (NYSE:HOS)$1.42 billion-1.3%
Navios Maritime Partners (NYSE:NMM)$854.2 million+1.2%
Seacor Holdings (NYSE:CKH)$1.84 billion-1.1%
Copa Holdings (NYSE:CPA)$3.46 billion-0.8%
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After a decline of 2.1%, China Southern Airlines Limited (NYSE:ZNH) has hit a share price of $21.89. This morning, the company's volume is 1,215 shares. This is 0.1 times the current daily 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. 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. 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. ZNH has a capitalization ratio of 57.3%, which is on the high end. If the company is a company is in a highly competitive business and hobbled by high debt, it will find its competitors taking advantage of its problems to grab more market share. A low level of debt and a healthy proportion of equity in a company's capital structure is an indication of financial fitness.

Slipping 1.7%, Lan Airlines S.A (NYSE:LFL) is currently trading at $23.70 per share. At 129,046 shares, the company's volume so far today is which is likely to result in less activity than yesterday's volume of 377,160 shares. High volume indicates a lot of investor interest while low volume indicates the opposite. Understanding investment valuation ratios allows an investor to assess the true value of an individual stock. As with most ratios, comparisons of company price/earnings to growth ratios (PEG ratios) are most appropriate for similar companies. LFL's PEG ratio is 6.2. 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.

GATX (NYSE:GMT) has decreased to $41.46 per share, a 1.3% fall. This morning, the company is trading a volume of 70,210 shares. The trading volume for a stock indicates the level of investor interest. Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. 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. The P/B ratio for GMT is 1.66, indicating that the stock is trading for more 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. 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: Using The Price-To-Book Ratio To Evaluate Companies

Falling 1.3%, Hornbeck Offshore Services (NYSE:HOS) is currently at a share price of $39.55. The company's volume for the day so far is 174,040 shares, 0.4 times the current three-month average. Volume is used to evaluate how meaningful the price movement of a stock is. 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. The price/earnings ratio is calculated by taking a stock price and dividing it by the earnings-per-share (EPS). HOS' P/E ratio of 39.3 is above the industry average of 15.13. 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. 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 1.2%, Navios Maritime Partners (NYSE:NMM) is trading at $14.38 per share. So far this morning, 67,404 shares have changed hands. This is 0.3 times the average daily volume. In technical analysis, trading volume is used to determine the strength of a market indicator. 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 measures the leverage of a company, and a company's leverage is a good way to assess risk. The debt ratio for NMM is a low 34.7%. 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. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.

Currently trading at $86.92 per share, Seacor Holdings (NYSE:CKH) has fallen 1.1%. This morning, 8,631 shares have been traded, on pace to finish the day below yesterday's volume of 37,378 shares. 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. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. The price/sales ratio measures a company's stock market price by its revenues. CKH has a low P/S ratio of 0.88. Coupled with high relative strength in the previous twelve months, a low P/S ratio is one of the most potent combinations of investment criteria. All things being equal, a low P/S ratio is good news for investors, while a very high one can be a warning sign.

Copa Holdings (NYSE:CPA) is down 0.8% to reach $77.45 per share. So far today, the company's volume is 50,413 shares. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. 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 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. CPA's capitalization ratio is 42.6%. The capitalization ratio is one of the more meaningful debt ratios because it focuses on the relationship of debt liabilities as a component of a company's total capital base, which is the capital raised by shareholders and lenders.

The Bottom Line On any given day, a particular stock may see positive or negative change in its share price. Daily stock performance should be weighed against historical performance and put in context of the market overall. However, these fundamental metrics must be analyzed with historic data, industry information in addition to firm specific financial statements.

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