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Tickers in this Article: DNKN, NAV, VRA, RL, ACAT, TPX, TEN
The market has been doing well after the morning's trading. The Nasdaq has moved up 0.3%; the S&P 500 has climbed 0.6%; and the Dow is up 0.7%. 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.

Underperforming the market overall, the Consumer Cyclical sector (XLY) is up 0.2%, and these are its current biggest movers:
CompanyMarket CapPercentage Change
Dunkin\' Brands Group (Nasdaq:DNKN)$3.53 billion+4.4%
Navistar (NYSE:NAV)$1.65 billion+3.7%
Vera Bradley (Nasdaq:VRA)$905.9 million-3.4%
Polo Ralph Lauren (NYSE:RL)$14.61 billion-3.2%
Arctic Cat (Nasdaq:ACAT)$599 million-2.7%
Tempur-Pedic International (NYSE:TPX)$1.88 billion+2.7%
Tenneco (NYSE:TEN)$1.89 billion+2.6%
Broker Summary: Charles Schwab Online Brokerage

Dunkin' Brands Group (Nasdaq:DNKN) has risen 4.4% to hit a current price of $30.61 per share. So far today, the company's volume is 1.1 million shares,. Volume indicates the level of interest that investors have in a company at its current price. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. A price/sales ratio is derived by dividing stock market price by company sales. The P/S ratio for DNKN is 6.3, which is relatively high. In young companies, a high P/S ratio is a sign of sales growth that is expected to turn into earnings and cash flow. 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.

Rising 3.7%, Navistar (NYSE:NAV) is currently trading at $24.87 per share. The company's volume for the day so far is 462,097 shares. This is 0.2 times the current three-month average. A stock's volume conveys how excited investors are about it. 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 debt ratio gives users a quick measure of the amount of debt that the company has on its balance sheets compared to its assets. NAV's debt ratio of 103.7% is fairly high. This might mean that the company now has low borrowing capacity, which reduces it's financial flexibility. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.

Vera Bradley (Nasdaq:VRA) has fallen 3.4% and is currently trading at $21.59 per share. At 439,779 shares, the company's volume so far today is 0.3 times the average daily volume. Volume is an important indicator because it indicates how significant a price shift is. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. The P/E ratio has been used for ages by analysts and still remains one of the most relevant pieces of stock valuation. Relative to the industry P/E ratio of 24.6, VRA's 15.3 is low. A low P/E might arise due to substantial inherent risk of the firm and its operations, poor return on equity, or improper valuation of the market. 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: Understanding The P/E Ratio

Polo Ralph Lauren (NYSE:RL) is down 3.2% to reach $155.10 per share. So far today, the company's volume is 1.5 million 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. Investment valuation ratios can be very useful in estimating whether a stock price is too high, reasonable or a bargain investment opportunity. The debt-equity (D/E) ratio compares the total liabilities for a company to its total shareholder equity. RL's debt-equity ratio of 8% is on the low end. Companies with low D/E ratios are more attractive to investors because they are better able to protect their business interests in times of decline. The D/E ratio is not a pure measurement of a company's debt because it includes operational liabilities in total liabilities.

Currently trading at $44.35 per share, Arctic Cat (Nasdaq:ACAT) has fallen 2.7%. So far today, 72,850 shares have changed hands, lighter than yesterday's volume of 320,873 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. 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. Using price/earnings ratios (P/E ratios) does not give an indication of whether or not an individual company's ratio is reasonable, a shortcoming that can be corrected by using the price/earnings to growth ratio (PEG ratio). PEG ratio for ACAT is consistent with the industry average at 1.04. Because of the adjustment for earnings growth rate, the PEG ratio is somewhat more useful than many formulas for comparing companies in different industries.

Tempur-Pedic International (NYSE:TPX) has moved up 2.7% and is currently trading at $32.47 per share. So far today, 284,011 shares have changed hands. This is 0.2 times its current three-month average. If a stock price moves on high volume, this means that the change is a significant one. 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 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. The P/S ratio for TPX is a high 1.02. This could be a good sign if the share price increases. A limitation of the P/S ratio is that the price component measures only stock market captialization, while sales are a function of the entire capital structure, potentially leading to wide differences between levered and unlevered companies.

After an increase of 2.6%, Tenneco (NYSE:TEN) has reached a current price of $32.24. The company's volume is currently 91,352 shares for the day, 0.2 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. 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 debt ratio is calculated by dividing total liabilities by total assets. TEN has a debt ratio of 97.4%, which is on the high side. This means that most of the company's assets are financed through debt. 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 The nature of the market is such that stocks will have good days and bad days. 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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