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Tickers in this Article: FNP, SKX, AXL, WPRT, SHOO, ALV, RL
The Nasdaq has risen 0.4%, the S&P 500 is up 0.1% and the Dow has decreased 0.2% after the morning's trading. 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 Consumer Cyclical sector (XLY) has climbed 0.2% so far today and here are its biggest movers:
CompanyMarket CapPercentage Change
Liz Claiborne (NYSE:FNP)$1.44 billion-11.8%
Skechers USA (NYSE:SKX)$1.02 billion-10.4%
American Axle & Manufact. Holdings (NYSE:AXL)$870.4 million-3.7%
Westport Innovations Inc (Nasdaq:WPRT)$1.55 billion+3.4%
Steven (Nasdaq:SHOO)$1.94 billion+3.3%
Autoliv (NYSE:ALV)$6.06 billion+2.1%
Polo Ralph Lauren (NYSE:RL)$13.83 billion+1.8%
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Shares of Liz Claiborne (NYSE:FNP) are currently trading at $11.26, a steep decline of 11.8%. So far today, the company's volume is 4.2 million shares, 4.7 times the current daily average. Volume is an important indicator because it indicates how significant a price shift is. Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. The debt ratio shows the proportion of assets that a company is financing through debt. FNP's debt ratio of 119.5% is fairly high. This means that most of the company's assets are financed through debt. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.

After a precipitous drop of 10.4%, Skechers USA (NYSE:SKX) is now trading at a share price of $18.26. The company's volume for the day so far is 1.1 million shares. Yesterday's volume was only 462,782 shares. High volume indicates a lot of investor interest while low volume indicates the opposite. 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 debt-equity (D/E) ratio compares the total liabilities for a company to its total shareholder equity. SKX's debt-equity ratio of 17% is on the low end. A low D/E ratio may be a sign that the company is not taking advantage of leverage to increase its profits. The D/E ratio is not a pure measurement of a company's debt because it includes operational liabilities in total liabilities.

Slipping 3.7%, American Axle & Manufact. Holdings (NYSE:AXL) is currently trading at $11.20 per share. The company's volume is currently 794,464 shares for the day, in keeping with its current three-month average. 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. 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. AXL has a capitalization ratio of 150.6%, which is on the high end. The company may have trouble meeting operating and debt liabilities on time and surviving adverse economic conditions. 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.

Westport Innovations Inc (Nasdaq:WPRT) is currently trading at $29.12 per share, a 3.4% increase. The company's volume for the day so far is 747,366 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. 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. The price/book value ratio is one of the more common methods of determining whether a stock is fairly valued. The P/B ratio for WPRT is 4.04, indicating that the stock is trading for more 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. P/B value ratios are particularly useful to value investors, distressed or "vulture" investors, or any other investors purchasing beaten-down securities but are less useful to investors focused on growth stocks, purchasing IPOs, or investing in technology or other "asset-lite" companies. SEE: Investment Valuation Ratios: Price/Book Value Ratio

Rising 3.3%, Steven (Nasdaq:SHOO) is currently trading at $43.81 per share. At 144,294 shares, the company's volume so far today is 0.3 times the average daily volume. 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. Understanding investment valuation ratios allows an investor to assess the true value of an individual stock. 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. SHOO has a high P/S ratio of 1.22. This could be a good sign if the share price increases. 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.

Autoliv (NYSE:ALV) has risen 2.1% and is currently trading at $64.86 per share. The company's volume is currently 291,536 shares. This is on pace to fall short of yesterday's volume of 738,359 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. 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. The debt ratio for ALV is a low 44.4%. This indicates that the company engages in conservative financing with opportunities to borrow in the future at no significant risk. 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.

Polo Ralph Lauren (NYSE:RL) is at $154.46 per share after an increase of 1.8%. So far today, the company's volume is 364,896 shares, consistent with its current three-month average. 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. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. The debt-equity (D/E) ratio is a leverage ratio. RL has a low debt-equity ratio of 8%. This shows that the company's assets are financed primarily through equity. The D/E ratio percentage provides a much more dramatic perspective on a company's leverage position than the debt ratio percentage.

The Bottom Line The nature of the market is such that stocks will have good days and bad days. 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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