Currently, the Nasdaq has moved up 0.4%, the S&P 500 has moved up 0.3% and the Dow has been relatively flat. 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.
These are the biggest movers in the Transportation sector (IYT) (+0.1%):
|Company||Market Cap||Percentage Change|
|United Continental Holdings (NYSE:UAL)||$6.7 billion||-4%|
|Costamare (NYSE:CMRE)||$1.02 billion||+2.5%|
|Teekay (NYSE:TK)||$2.15 billion||+2.4%|
|Ryanair Holdings plc (Nasdaq:RYAAY)||$9.19 billion||+2.2%|
|Allegiant Travel (Nasdaq:ALGT)||$1.25 billion||-1.8%|
|AMERCO (Nasdaq:UHAL)||$2.08 billion||+1.4%|
|Golar LNG Limited (Nasdaq:GLNG)||$3.05 billion||+1.1%|
Broker Summary: Fidelity Online Brokerage
United Continental Holdings (NYSE:UAL) has decreased to $19.36 per share, a 4% fall. So far today, the company's volume is 2.1 million shares. The trading volume for a stock indicates the level of investor 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 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. UAL's capitalization ratio of 87% is relatively high. The company may have trouble meeting operating and debt liabilities on time and surviving adverse economic conditions. A low level of debt and a healthy proportion of equity in a company's capital structure is an indication of financial fitness.
Costamare (NYSE:CMRE) has moved up 2.5% and is currently trading at $15.45 per share. So far today, 73,850 shares have changed hands, with trading activity in keeping with yesterday's. 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. 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. CMRE's PEG ratio is 2.43. While P/E ratios are important indicators of market value, a high P/E in and of itself is not bad because it may indicate a company whose earnings are growing very rapidly, so many investors look at the PEG ratio in order to get an idea of whether or not a particular P/E ratio is justified by underlying earnings growth.
Teekay (NYSE:TK) has increased to a share price of $31.78, a 2.4% rise. So far this morning, 86,069 shares have changed hands. This is 0.3 times its average daily volume. High volume indicates a lot of investor interest while low volume indicates the opposite. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. The price/book value ratio, often expressed simply as "price-to-book", provides investors a way to compare the market value, or what they are paying for each share, to a conservative measure of the value of the firm. The P/B ratio for TK is 1.64, indicating that the stock is trading for more than its book value. 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: Investment Valuation Ratios: Price/Book Value Ratio
Ryanair Holdings plc (Nasdaq:RYAAY) is up 2.2% to reach a current price of $32.60 per share. The company's volume is currently 202,703 shares for the day, 0.7 times its average over the past three months. If a stock price makes a big move up or down, volume lets us know the significance of that move. 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. In a nutshell, the price/sales ratio shows how much Wall Street values every dollar of the company's sales. RYAAY's P/S ratio of 1.45 is on the high side. In young companies, a high P/S ratio is a sign of sales growth that is expected to turn into earnings and cash flow. All things being equal, a low P/S ratio is good news for investors, while a very high one can be a warning sign.
Falling 1.8%, Allegiant Travel (Nasdaq:ALGT) is currently at a share price of $63.74. The company's volume for the day so far is 10,440 shares. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. Investment valuation ratios can be very useful in determining the value of a stock, but it is very important to keep in mind that while some financial ratios have general rules (or a broad application), in most instances it is a prudent practice to look at a company's historical performance and use peer company/industry comparisons to put any given company's ratio in perspective. Price/earnings ratios (P/E ratios) provide a measure of the relative value of a stock. ALGT's P/E ratio of 18.5 is under the industry average of 50.97. Companies with low P/E ratios may find it easier to surprise the market to the upside, even if their financial performance is not as strong as that of companies with high P/E ratios. From the investor's perspective, a stock with a lower ratio is relatively cheaper than a stock with a higher ratio. SEE: Profit With The Power Of Price-To-Earnings
Rising 1.4%, AMERCO (Nasdaq:UHAL) is currently trading at $107.75 per share. This morning, 16,901 shares have been traded,. If a stock price moves on high volume, this means that the change is a significant one. 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 debt-equity (D/E) ratio is a measurement of how much suppliers, lenders, creditors and obligors have committed to the company versus what the shareholders have committed. UHAL has a D/E ratio of 162%, which is relatively high. This shows that the company's assets are financed primarily through debt. The D/E ratio percentage provides a much more dramatic perspective on a company's leverage position than the debt ratio percentage.
After an increase of 1.1%, Golar LNG Limited (Nasdaq:GLNG) has reached a current price of $38.35. So far today, the company's volume is 166,905 shares. This is 0.3 times the average daily volume. In technical analysis, trading volume is used to determine the strength of a market indicator. Investment valuation ratios can be very useful in estimating whether a stock price is too high, reasonable or a bargain investment opportunity. 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. GLNG has a capitalization ratio of 56.2%, which is on the high end. A company considered too highly leveraged (too much debt) may find its freedom of action restricted by its creditors and/or have its profitability hurt by high interest costs. 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.
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. 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.