Free Annual Reports
Rio Tinto plc and Other Big Movers In Basic Materials on September 24, 2012
The market is having a bad day so far: the Nasdaq is down 0.7%; the S&P 500 has fallen 0.2%; and the Dow has decreased 0.2%. The basic materials sector is the category of stocks that accounts for companies involved with the discovery, development and processing of raw materials. This sector includes the mining and refining of metals, chemical producers and forestry products. The basic materials sector is sensitive to changes in the business cycle. Because the sector supplies materials for construction, it depends on a strong economy. This sector is also sensitive to supply and demand fluctuations because the price of raw materials, such as gold or other metals, is largely demand driven.
The Basic Materials sector (XLB) is down 0.3%, outperforming the market overall. Currently, the biggest movers in the sector are:
Broker Summary: OptionsXpress Online Trading Platform
After rising 7%, KapStone Paper and (NYSE:KS) is currently trading at a share price of $22.05. At 238,544 shares, the company's volume so far today is in keeping with its current daily average. Volume is an important indicator because it indicates how significant a price shift is. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. 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. KS has a low debt ratio of 48%. 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.
Rising 3.2%, Packaging Corp Of (NYSE:PKG) is currently trading at $34.84 per share. So far today, 1.2 million shares of the company's stock have changed hands. This is about the same trading activity as there was yesterday. 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. The price/earnings to growth (PEG) ratio is calculated by dividing the price/earnings ratio by growth in earnings-per-share; the lower the PEG ratio, the more reasonably valued the security. PEG ratio for PKG is consistent with the industry average at 2.49. Because of the adjustment for earnings growth rate, the PEG ratio is somewhat more useful than many formulas for comparing companies in different industries.
International (NYSE:IP) is up 3.1% to reach a current price of $36.60 per share. The company's volume is currently 5.6 million shares for the day, one times the current three-month average. 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 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. The capitalization ratio for IP is 65.4%, which is fairly high. If the company is a company is in a highly competitive business and hobbled by high debt, it will find its competitors taking advantage of its problems to grab more market share. A low level of debt and a healthy proportion of equity in a company's capital structure is an indication of financial fitness.
Celanese (NYSE:CE) is trading at $38.98 per share, down 2.6%. The company is currently trading a volume of 927,989 shares. High volume indicates a lot of investor interest while low volume indicates the opposite. 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. 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. CE's P/E ratio of 9.7 is under the industry average of 13.45. 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. High P/E stocks could be "growth" stocks, while low PE stocks may be "value" stocks. SEE: Understanding The P/E Ratio
Agnico-Eagle Mines Limited (NYSE:AEM) has decreased to $50.85 per share, a 2.3% fall. So far today, the company's volume is 719,234 shares, 0.3 times the average daily volume. 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 provide investors with an estimation, albeit a simplistic one, of the value of a stock. The debt-equity (D/E) ratio compares the total liabilities for a company to its total shareholder equity. AEM's debt-equity ratio of 26% 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.
Slipping 2.1%, Randgold Resources Ltd (Nasdaq:GOLD) is currently trading at $121.21 per share. The company is trading at a volume of 391,229 shares. This is a sign that there will be less trading activity than there was yesterday. Volume indicates the level of interest that investors have in a company at its current price. 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. If the price/book value ratio of a stock is high, it may indicate that the stock is expensive, while a lower ratio may indicate that the stock is a bargain. The P/B ratio for GOLD is 4.68, indicating that the stock is trading for more than its book value. This may be a sign that the company is overvalued. 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
Rio Tinto plc (NYSE:RIO) is down 2.1% to reach $48.39 per share. At 1.5 million shares, the company's volume so far today is in keeping with the average volume over the past three months. The trading volume for a stock indicates the level of investor interest. Looking at a company's valuation ratios is a good way of getting a basic idea as to its value as an investment. Dividend yield measures the income that a stock will generate for an investor. RIO has a dividend yield of 3%. Simply comparing the level of dividends that two stocks pay does not give a true reflection of which security is more attractive, so investors calculate the dividend yield in order to standardize dividend payments. SEE: Guide To Stock-Picking Strategies: Income Investing
The Bottom Line On any given day, a particular stock may see positive or negative change in its share price. It is important to weigh current activity against historical performance when making any investment decisions. However, these fundamental metrics must be analyzed with historic data, industry information in addition to firm specific financial statements.
The Basic Materials sector (XLB) is down 0.3%, outperforming the market overall. Currently, the biggest movers in the sector are:
| Company | Market Cap | Percentage Change |
| KapStone Paper and (NYSE:KS) | $962.8 million | +7% |
| Packaging Corp Of (NYSE:PKG) | $3.31 billion | +3.2% |
| International (NYSE:IP) | $15.53 billion | +3.1% |
| Celanese (NYSE:CE) | $6.37 billion | -2.6% |
| Agnico-Eagle Mines Limited (NYSE:AEM) | $8.93 billion | -2.3% |
| Randgold Resources Ltd (Nasdaq:GOLD) | $11.38 billion | -2.1% |
| Rio Tinto plc (NYSE:RIO) | $91.58 billion | -2.1% |
After rising 7%, KapStone Paper and (NYSE:KS) is currently trading at a share price of $22.05. At 238,544 shares, the company's volume so far today is in keeping with its current daily average. Volume is an important indicator because it indicates how significant a price shift is. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. 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. KS has a low debt ratio of 48%. 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.
Rising 3.2%, Packaging Corp Of (NYSE:PKG) is currently trading at $34.84 per share. So far today, 1.2 million shares of the company's stock have changed hands. This is about the same trading activity as there was yesterday. 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. The price/earnings to growth (PEG) ratio is calculated by dividing the price/earnings ratio by growth in earnings-per-share; the lower the PEG ratio, the more reasonably valued the security. PEG ratio for PKG is consistent with the industry average at 2.49. Because of the adjustment for earnings growth rate, the PEG ratio is somewhat more useful than many formulas for comparing companies in different industries.
International (NYSE:IP) is up 3.1% to reach a current price of $36.60 per share. The company's volume is currently 5.6 million shares for the day, one times the current three-month average. 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 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. The capitalization ratio for IP is 65.4%, which is fairly high. If the company is a company is in a highly competitive business and hobbled by high debt, it will find its competitors taking advantage of its problems to grab more market share. A low level of debt and a healthy proportion of equity in a company's capital structure is an indication of financial fitness.
Celanese (NYSE:CE) is trading at $38.98 per share, down 2.6%. The company is currently trading a volume of 927,989 shares. High volume indicates a lot of investor interest while low volume indicates the opposite. 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. 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. CE's P/E ratio of 9.7 is under the industry average of 13.45. 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. High P/E stocks could be "growth" stocks, while low PE stocks may be "value" stocks. SEE: Understanding The P/E Ratio
Agnico-Eagle Mines Limited (NYSE:AEM) has decreased to $50.85 per share, a 2.3% fall. So far today, the company's volume is 719,234 shares, 0.3 times the average daily volume. 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 provide investors with an estimation, albeit a simplistic one, of the value of a stock. The debt-equity (D/E) ratio compares the total liabilities for a company to its total shareholder equity. AEM's debt-equity ratio of 26% 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.
Slipping 2.1%, Randgold Resources Ltd (Nasdaq:GOLD) is currently trading at $121.21 per share. The company is trading at a volume of 391,229 shares. This is a sign that there will be less trading activity than there was yesterday. Volume indicates the level of interest that investors have in a company at its current price. 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. If the price/book value ratio of a stock is high, it may indicate that the stock is expensive, while a lower ratio may indicate that the stock is a bargain. The P/B ratio for GOLD is 4.68, indicating that the stock is trading for more than its book value. This may be a sign that the company is overvalued. 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
Rio Tinto plc (NYSE:RIO) is down 2.1% to reach $48.39 per share. At 1.5 million shares, the company's volume so far today is in keeping with the average volume over the past three months. The trading volume for a stock indicates the level of investor interest. Looking at a company's valuation ratios is a good way of getting a basic idea as to its value as an investment. Dividend yield measures the income that a stock will generate for an investor. RIO has a dividend yield of 3%. Simply comparing the level of dividends that two stocks pay does not give a true reflection of which security is more attractive, so investors calculate the dividend yield in order to standardize dividend payments. SEE: Guide To Stock-Picking Strategies: Income Investing
The Bottom Line On any given day, a particular stock may see positive or negative change in its share price. It is important to weigh current activity against historical performance when making any investment decisions. However, these fundamental metrics must be analyzed with historic data, industry information in addition to firm specific financial statements.
by
Investopedia Staff
Investopedia.com believes that individuals can excel at managing their financial affairs. As such, we strive to provide free educational content and tools to empower individual investors, including thousands of original and objective articles and tutorials on a wide variety of financial topics.
Free Annual Reports
