The Nasdaq is down 0.6%, the S&P 500 remains relatively unchanged and the Dow is up 0.1% so far today. 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.

The biggest movers in the Consumer Cyclical sector (XLY) (+0.3%) are:


CompanyMarket CapPercentage Change
Rush Enterprises (Nasdaq:RUSHB)$583.5 million+6.1%
Westport Innovations Inc (Nasdaq:WPRT)$1.84 billion-6.1%
Vera Bradley (Nasdaq:VRA)$866.2 million+4.8%
Michael Kors (NYSE:KORS)$10.83 billion-4%
Polaris Industries (NYSE:PII)$5.38 billion+3.5%
Arctic Cat (Nasdaq:ACAT)$578.9 million+3.4%
Shutterfly (Nasdaq:SFLY)$1.15 billion-3.3%
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Rising 6.1%, Rush Enterprises (Nasdaq:RUSHB) is currently trading at $15.99 per share. So far today, 6,900 shares of the company's stock have changed hands. 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.

Falling 6.1%, Westport Innovations Inc (Nasdaq:WPRT) is currently at a share price of $31.38. At 741,016 shares, the company's volume so far today is one times the current daily 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. 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 capitalization ratio is calculated by dividing long-term debt by the sum of long-term debt and shareholders' equity. The capitalizion ratio of 13.5% is on the low end. A very low capitalization ratio might be a sign that the company is stagnating and reducing the potential earnings for shareholders. 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.

After rising 4.8%, Vera Bradley (Nasdaq:VRA) is currently trading at a share price of $22.40. This morning, the company is trading a volume of 203,575 shares. 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 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 price/earnings to growth (PEG) ratio divides a company's P/E ratio by its growth rate of earnings-per-share. VRA's PEG ratio is 0.77. 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.

At $53.81, Michael Kors (NYSE:KORS) has slipped 4%. So far today, the company's volume is 2.3 million shares, 0.8 times the average volume over the last three months. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. 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 price/book value ratio is one of the more common methods of determining whether a stock is fairly valued. KORS' stock is trading for more than its book value with a P/B ratio of 19.43. This may be a sign that the company is overvalued. All else being equal, a stock with a low P/B value ratio is more attractive than a stock with a high ratio. SEE: Using The Price-To-Book Ratio To Evaluate Companies

Increasing 3.5%, Polaris Industries (NYSE:PII) is trading at $81.29 per share. The company's volume is currently 528,731 shares. A stock's volume conveys how excited investors are about it. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. One of the most important estimates of stock market valuation is the price/earnings ratio (P/E ratio). The P/E ratio for PII is 21.4, above the industry average of 6.06. Generally speaking, the higher the P/E ratio, the higher the market expectations for a company's future performance. A high or low P/E ratio is not good or bad in and of itself, but a company trading with a high P/E ratio must continue to post strong financial performance or its stock price is likely to fall. SEE: How To Find P/E And PEG Ratios

Arctic Cat (Nasdaq:ACAT) has moved up 3.4% and is currently trading at $45.51 per share. The company's volume is currently 125,396 shares for the day, one times its current daily average. The trading volume for a stock indicates the level of investor interest. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. The price/sales ratio measures a company's stock market value by its total revenues or alternatively, a company's price per share by its revenue per share. ACAT has a low P/S ratio of 0.77. The lower the P/S ratio, the more reasonably price the stock, all else being equal. All things being equal, a low P/S ratio is good news for investors, while a very high one can be a warning sign.

Shutterfly (Nasdaq:SFLY) has decreased to $31.02 per share, a 3.3% fall. The company's volume for the day so far is 179,639 shares. Volume is an important indicator because it indicates how significant a price shift is. 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. 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 SFLY is a low 10.9%. A low debt ratio means the company has more available cash flow. 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.

The Bottom Line No matter the economic climate, Wall Street will always have stocks that make major moves each week. 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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Tickers in this Article: RUSHB, WPRT, VRA, KORS, PII, ACAT, SFLY

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