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Norfolk Southern Among Transportation's Biggest Movers on September 4, 2012
It's been a bad day for the market after the morning's trading. The Nasdaq is down 0.8%; the S&P 500 is trading down 0.5%; and the Dow has slipped 0.7%. 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 currently ahead of the overall market, down only 0.8%, and its biggest movers are currently:
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Costamare (NYSE:CMRE) is at $14.06 per share after an increase of 6.8%. The company is trading at a volume of 353,178 shares. This is greater than yesterday's volume of 109,186 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. Dividend yield is a way to measure how much cash flow you are getting for each dollar invested in an equity position - in other words, how much "bang for your buck" you are getting from dividends. Dividend yield for CMRE is a high 8.2%. This could be a sign that the company is a "dividend trap" as companies with high dividends can be risky investments. 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: Investment Valuation Ratios: Dividend Yield
Rising 4.4%, AMERCO (Nasdaq:UHAL) is currently trading at $97.10 per share. So far today, the company's volume is 18,967 shares, one times its current daily average. 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. A price/sales ratio is derived by dividing stock market price by company sales. UHAL has a low P/S ratio of 0.7. A company with a lower P/S ratio is generally considered more attractive, since investors are 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.
After rising 2.2%, Ship Finance (NYSE:SFL) is currently trading at a share price of $16.50. So far today, the company's volume is 322,237 shares. In technical analysis, trading volume is used to determine the strength of a market indicator. 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 debt ratio shows the proportion of assets that a company is financing through debt. SFL has a debt ratio of 69.8%, which is on the high side. This might mean that the company now has low borrowing capacity, which reduces it's financial flexibility. 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.
Currently trading at $70.90 per share, Norfolk Southern (NYSE:NSC) has fallen 2.2%. The company's volume for the day so far is 956,941 shares, 0.7 times its average over the past three months. A stock's volume conveys how excited investors are about it. Understanding investment valuation ratios allows an investor to assess the true value of an individual stock. 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. The D/E ratio for NSC is 82%. The D/E ratio percentage provides a much more dramatic perspective on a company's leverage position than the debt ratio percentage.
GulfMark Offshore (NYSE:GLF) is down 2.1% to reach $34.34 per share. The company's volume is currently 38,055 shares. This is on pace to fall short of yesterday's volume of 114,103 shares. 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. 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. Compared to the industry average of 12.68, GLF's P/E ratio of 18.8 is quite high. This could mean that the market is expecting big things over the next few months or years. High P/E stocks could be "growth" stocks, while low PE stocks may be "value" stocks. SEE: How To Use The P/E Ratio And PEG To Tell The Future Of A Stock
Teekay (NYSE:TK) has risen 1.7% to hit a current price of $30.08 per share. At 144,034 shares, the company's volume so far today is 0.7 times the average daily volume. High volume indicates a lot of investor interest while low volume indicates the opposite. 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 capitalization ratio is calculated by dividing long-term debt by the sum of long-term debt and shareholders' equity. The capitalization ratio for TK is 80.3%, which is fairly high. A high capitalization ratio is not necessarily bad since higher financial leverage can increase the return on a shareholder's investment. 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.
Falling 1.5%, Hornbeck Offshore Services (NYSE:HOS) is currently at a share price of $38.24. The company's volume for the day so far is 165,467 shares. Volume indicates the level of interest that investors have in a company at its current price. 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. 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. HOS' stock is trading for more than its book value with a P/B ratio of 1.24. 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
The Bottom Line On any given day, a particular stock may see positive or negative change in its share price. 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.
The Transportation sector (IYT) is currently ahead of the overall market, down only 0.8%, and its biggest movers are currently:
| Company | Market Cap | Percentage Change |
| Costamare (NYSE:CMRE) | $892.9 million | +6.8% |
| AMERCO (Nasdaq:UHAL) | $1.82 billion | +4.4% |
| Ship Finance (NYSE:SFL) | $1.28 billion | +2.2% |
| Norfolk Southern (NYSE:NSC) | $23.15 billion | -2.2% |
| GulfMark Offshore (NYSE:GLF) | $945.2 million | -2.1% |
| Teekay (NYSE:TK) | $2.05 billion | +1.7% |
| Hornbeck Offshore Services (NYSE:HOS) | $1.37 billion | -1.5% |
Costamare (NYSE:CMRE) is at $14.06 per share after an increase of 6.8%. The company is trading at a volume of 353,178 shares. This is greater than yesterday's volume of 109,186 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. Dividend yield is a way to measure how much cash flow you are getting for each dollar invested in an equity position - in other words, how much "bang for your buck" you are getting from dividends. Dividend yield for CMRE is a high 8.2%. This could be a sign that the company is a "dividend trap" as companies with high dividends can be risky investments. 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: Investment Valuation Ratios: Dividend Yield
Rising 4.4%, AMERCO (Nasdaq:UHAL) is currently trading at $97.10 per share. So far today, the company's volume is 18,967 shares, one times its current daily average. 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. A price/sales ratio is derived by dividing stock market price by company sales. UHAL has a low P/S ratio of 0.7. A company with a lower P/S ratio is generally considered more attractive, since investors are 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.
After rising 2.2%, Ship Finance (NYSE:SFL) is currently trading at a share price of $16.50. So far today, the company's volume is 322,237 shares. In technical analysis, trading volume is used to determine the strength of a market indicator. 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 debt ratio shows the proportion of assets that a company is financing through debt. SFL has a debt ratio of 69.8%, which is on the high side. This might mean that the company now has low borrowing capacity, which reduces it's financial flexibility. 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.
Currently trading at $70.90 per share, Norfolk Southern (NYSE:NSC) has fallen 2.2%. The company's volume for the day so far is 956,941 shares, 0.7 times its average over the past three months. A stock's volume conveys how excited investors are about it. Understanding investment valuation ratios allows an investor to assess the true value of an individual stock. 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. The D/E ratio for NSC is 82%. The D/E ratio percentage provides a much more dramatic perspective on a company's leverage position than the debt ratio percentage.
GulfMark Offshore (NYSE:GLF) is down 2.1% to reach $34.34 per share. The company's volume is currently 38,055 shares. This is on pace to fall short of yesterday's volume of 114,103 shares. 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. 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. Compared to the industry average of 12.68, GLF's P/E ratio of 18.8 is quite high. This could mean that the market is expecting big things over the next few months or years. High P/E stocks could be "growth" stocks, while low PE stocks may be "value" stocks. SEE: How To Use The P/E Ratio And PEG To Tell The Future Of A Stock
Teekay (NYSE:TK) has risen 1.7% to hit a current price of $30.08 per share. At 144,034 shares, the company's volume so far today is 0.7 times the average daily volume. High volume indicates a lot of investor interest while low volume indicates the opposite. 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 capitalization ratio is calculated by dividing long-term debt by the sum of long-term debt and shareholders' equity. The capitalization ratio for TK is 80.3%, which is fairly high. A high capitalization ratio is not necessarily bad since higher financial leverage can increase the return on a shareholder's investment. 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.
Falling 1.5%, Hornbeck Offshore Services (NYSE:HOS) is currently at a share price of $38.24. The company's volume for the day so far is 165,467 shares. Volume indicates the level of interest that investors have in a company at its current price. 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. 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. HOS' stock is trading for more than its book value with a P/B ratio of 1.24. 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
The Bottom Line On any given day, a particular stock may see positive or negative change in its share price. 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
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