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Pentair and More Big Movers in Capital Goods on September 19, 2012
The Nasdaq is up 0.1%, the S&P 500 is up 0.2% and the Dow has climbed 0.3% on a good day for the market so far. The capital goods sector is the category of stocks related to the manufacture or distribution of goods. The sector is diverse, containing companies that manufacture machinery used to create capital goods, electrical equipment, aerospace and defense, engineering and construction projects. It is also referred to as the "industrials sector". Performance in the capital goods sector is sensitive to fluctuations in the business cycle. Because it relies heavily on manufacturing, the sector does well when the economy is booming or expanding. As economic conditions worsen, the demand for capital goods drops off, usually lowering the prices of stocks in the sector.
The Capital Goods sector (XLI) is up 0.2%, outperforming the market overall. The biggest movers in the sector so far are:
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Increasing 5.2%, Ryland Group (NYSE:RYL) is trading at $31.64 per share. With 782,564 shares changing hands so far today, the company's volume is 0.6 times its average over the past three months. High volume indicates a lot of investor interest while low volume indicates the opposite. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the 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. RYL's stock is trading for more than its book value with a P/B ratio of 3.11. 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. One problem with the P/B value ratio is that it can be difficult to calculate the true book value of a company, so investors should be aware that many measures of book value may provide only a rough estimate, and should be taken with a grain of salt. SEE: How Buybacks Warps The Price-To-Book Ratio
After rising 3.8%, M.D.C. Holdings (NYSE:MDC) is currently trading at a share price of $39.14. The company is currently trading a volume of 263,371 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. 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 gives users a quick measure of the amount of debt that the company has on its balance sheets compared to its assets. MDC has a debt ratio of 53.1%. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.
Pentair (NYSE:PNR) is at $44.24 per share after an increase of 3.4%. So far today, the company's volume is 1.4 million shares, 1.2 times the average daily volume. If a stock price moves on high volume, this means that the change is a significant one. 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. 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 PNR is 62%. This easy-to-calculate ratio provides a general indication of a company's equity-liability relationship and is helpful to investors looking for a quick take on a company's leverage.
Toro (NYSE:TTC) has increased to a share price of $40.13, a 2.7% rise. The company's volume is currently 151,075 shares. A stock's volume conveys how excited investors are about it. Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. A price/sales ratio is derived by dividing stock market price by company sales. The P/S ratio for TTC is a high 1.11. 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.
Rising 2.6%, Chart Industries (Nasdaq:GTLS) is currently trading at $74.92 per share. The company's volume is currently 123,648 shares for the day, 0.3 times the current three-month average. When a stock price moves up or down, watching the volume is a good way of identifying how significant that 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. One of the most important estimates of stock market valuation is the price/earnings ratio (P/E ratio). GTLS has a P/E ratio of 37.8, high compared to the industry average of 14.04. A company with a high P/E ratio will eventually have to live up to the high rating by substantially increasing its earnings, or the price will need to drop. High P/E stocks could be "growth" stocks, while low PE stocks may be "value" stocks. SEE: Profit With The Power Of Price-To-Earnings
Sauer-Danfoss (NYSE:SHS) is currently trading at $41.01 per share, a 2.5% increase. This morning, the company is trading a volume of 38,842 shares. If a stock price makes a big move up or down, volume lets us know the significance of that move. 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. SHS' capitalization ratio is 26.2%, which is relatively low. Investors generally consider a company with low debt and high equity levels is a good quality investment. 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.
Currently trading at $49.27 per share, Cubic (NYSE:CUB) has fallen 2.5%. At 28,137 shares, the company's volume so far today is 0.4 times the current daily average. In technical analysis, trading volume is used to determine the strength of a market indicator. 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. Dividend yield measures the income that a stock will generate for an investor. The dividend yield for CUB is 0.5%, which is on the low end. This may indicate that the company's stock is overpriced. Just as with the yield on a bond or certificate of deposit, the higher the dividend yield, the higher the return to the investor. SEE: Investment Valuation Ratios: Dividend Yield
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. 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 Capital Goods sector (XLI) is up 0.2%, outperforming the market overall. The biggest movers in the sector so far are:
| Company | Market Cap | Percentage Change |
| Ryland Group (NYSE:RYL) | $1.35 billion | +5.2% |
| M.D.C. Holdings (NYSE:MDC) | $1.81 billion | +3.8% |
| Pentair (NYSE:PNR) | $4.24 billion | +3.4% |
| Toro (NYSE:TTC) | $2.3 billion | +2.7% |
| Chart Industries (Nasdaq:GTLS) | $2.18 billion | +2.6% |
| Sauer-Danfoss (NYSE:SHS) | $1.94 billion | +2.5% |
| Cubic (NYSE:CUB) | $1.35 billion | -2.5% |
Increasing 5.2%, Ryland Group (NYSE:RYL) is trading at $31.64 per share. With 782,564 shares changing hands so far today, the company's volume is 0.6 times its average over the past three months. High volume indicates a lot of investor interest while low volume indicates the opposite. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the 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. RYL's stock is trading for more than its book value with a P/B ratio of 3.11. 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. One problem with the P/B value ratio is that it can be difficult to calculate the true book value of a company, so investors should be aware that many measures of book value may provide only a rough estimate, and should be taken with a grain of salt. SEE: How Buybacks Warps The Price-To-Book Ratio
After rising 3.8%, M.D.C. Holdings (NYSE:MDC) is currently trading at a share price of $39.14. The company is currently trading a volume of 263,371 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. 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 gives users a quick measure of the amount of debt that the company has on its balance sheets compared to its assets. MDC has a debt ratio of 53.1%. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.
Pentair (NYSE:PNR) is at $44.24 per share after an increase of 3.4%. So far today, the company's volume is 1.4 million shares, 1.2 times the average daily volume. If a stock price moves on high volume, this means that the change is a significant one. 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. 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 PNR is 62%. This easy-to-calculate ratio provides a general indication of a company's equity-liability relationship and is helpful to investors looking for a quick take on a company's leverage.
Toro (NYSE:TTC) has increased to a share price of $40.13, a 2.7% rise. The company's volume is currently 151,075 shares. A stock's volume conveys how excited investors are about it. Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. A price/sales ratio is derived by dividing stock market price by company sales. The P/S ratio for TTC is a high 1.11. 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.
Rising 2.6%, Chart Industries (Nasdaq:GTLS) is currently trading at $74.92 per share. The company's volume is currently 123,648 shares for the day, 0.3 times the current three-month average. When a stock price moves up or down, watching the volume is a good way of identifying how significant that 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. One of the most important estimates of stock market valuation is the price/earnings ratio (P/E ratio). GTLS has a P/E ratio of 37.8, high compared to the industry average of 14.04. A company with a high P/E ratio will eventually have to live up to the high rating by substantially increasing its earnings, or the price will need to drop. High P/E stocks could be "growth" stocks, while low PE stocks may be "value" stocks. SEE: Profit With The Power Of Price-To-Earnings
Sauer-Danfoss (NYSE:SHS) is currently trading at $41.01 per share, a 2.5% increase. This morning, the company is trading a volume of 38,842 shares. If a stock price makes a big move up or down, volume lets us know the significance of that move. 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. SHS' capitalization ratio is 26.2%, which is relatively low. Investors generally consider a company with low debt and high equity levels is a good quality investment. 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.
Currently trading at $49.27 per share, Cubic (NYSE:CUB) has fallen 2.5%. At 28,137 shares, the company's volume so far today is 0.4 times the current daily average. In technical analysis, trading volume is used to determine the strength of a market indicator. 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. Dividend yield measures the income that a stock will generate for an investor. The dividend yield for CUB is 0.5%, which is on the low end. This may indicate that the company's stock is overpriced. Just as with the yield on a bond or certificate of deposit, the higher the dividend yield, the higher the return to the investor. SEE: Investment Valuation Ratios: Dividend Yield
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. 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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