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Southern and More Big Movers in Basic Materials on August 28, 2012
The market is currently down, with the Nasdaq slipping 0.1%, the S&P 500 down 0.1% and the Dow declining 0.1%. 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%, underperforming the market overall. The current biggest movers in the sector are:
Broker Summary: TD Ameritrade Thinkorswim
Molycorp (NYSE:MCP) is currently trading at $10.23 per share, a 7.5% increase. The company's volume is currently 7.6 million shares for the day, whereas yesterday, volume was only 5.4 million 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 debt-equity (D/E) ratio is a leverage ratio. MCP's D/E ratio is 77%. 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.
At $31.57, Polypore International (NYSE:PPO) has slipped 7.1%. The company is currently trading a volume of 2.3 million 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. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. 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 PPO is 54.7%, which is fairly high. 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. A low level of debt and a healthy proportion of equity in a company's capital structure is an indication of financial fitness.
Haynes International (Nasdaq:HAYN) has decreased to $49.28 per share, a 2.3% fall. The company's volume for the day so far is 18,540 shares, 0.2 times the current three-month average. High volume indicates a lot of investor interest while low volume indicates the opposite. Valuation ratios include 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 price/book value ratio provides a way of evaluating whether a stock is relatively cheap or expensive. HAYN's P/B ratio of 1.98 shows that its share price is higher 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. 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
Currently trading at $28.06 per share, American (NYSE:AVD) has fallen 2.2%. So far this morning, 39,484 shares have changed hands. This is 0.2 times the average daily volume. Volume is an important indicator because it indicates how significant a price shift is. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. 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. AVD has a P/E ratio of 28.4, high compared to the industry average of 14.92. 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. A high P/E ratio indicates a stock that is expensive, while a low P/E ratio indicates a stock that is cheap. SEE: Investment Valuation Ratios: Price/Earnings Ratio
Southern (NYSE:SCCO) has increased to a share price of $32.85, a 2% rise. So far today, 826,282 shares have changed hands,. Volume indicates the level of interest that investors have in a company at its current price. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. When used consistently and uniformly, the price/earnings to growth (PEG) ratio is an essential tool that adds dimension to the price/earnings ratio, allows comparisons across diverse industries and is always on the lookout for value. SCCO's PEG ratio is 1.25. 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.
After an increase of 1.9%, Compania de Minas Buenaventura SA (NYSE:BVN) has reached a current price of $34.70. This morning, the company is trading a volume of 176,625 shares. When a stock price moves up or down, watching the volume is a good way of identifying how significant that shift is. 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. For investors primarily interested in the income a stock can generate, the dividend yield is an important determinant of how attractive a stock is. Dividend yield for BVN is 2.3%. 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
Methanex Corporation (Nasdaq:MEOH) has risen 1.9% to hit a current price of $29.72 per share. With 73,329 shares changing hands so far today, the company's volume is 0.4 times its current three-month average. Volume is used to evaluate how meaningful the price movement of a stock is. 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. A price/sales ratio is derived by dividing stock market price by company sales. MEOH's P/S ratio of 0.97 is fairly low. Low P/S ratios are more attractive than high ratios because this indicates that an investor is paying less for each dollar of sales. 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.
The Bottom Line No matter the economic climate, Wall Street will always have stocks that make major moves each week. Daily stock performance should be weighed against historical performance and put in context of the market overall. Keep in mind that all these ratios should be compared against historical numbers and industry information in order to get a more complete picture.
The Basic Materials sector (XLB) is down 0.3%, underperforming the market overall. The current biggest movers in the sector are:
| Company | Market Cap | Percentage Change |
| Molycorp (NYSE:MCP) | $1.05 billion | +7.5% |
| Polypore International (NYSE:PPO) | $1.58 billion | -7.1% |
| Haynes International (Nasdaq:HAYN) | $619.6 million | -2.3% |
| American (NYSE:AVD) | $801.4 million | -2.2% |
| Southern (NYSE:SCCO) | $27.33 billion | +2% |
| Compania de Minas Buenaventura SA (NYSE:BVN) | $8.66 billion | +1.9% |
| Methanex Corporation (Nasdaq:MEOH) | $2.74 billion | +1.9% |
Molycorp (NYSE:MCP) is currently trading at $10.23 per share, a 7.5% increase. The company's volume is currently 7.6 million shares for the day, whereas yesterday, volume was only 5.4 million 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 debt-equity (D/E) ratio is a leverage ratio. MCP's D/E ratio is 77%. 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.
At $31.57, Polypore International (NYSE:PPO) has slipped 7.1%. The company is currently trading a volume of 2.3 million 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. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. 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 PPO is 54.7%, which is fairly high. 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. A low level of debt and a healthy proportion of equity in a company's capital structure is an indication of financial fitness.
Haynes International (Nasdaq:HAYN) has decreased to $49.28 per share, a 2.3% fall. The company's volume for the day so far is 18,540 shares, 0.2 times the current three-month average. High volume indicates a lot of investor interest while low volume indicates the opposite. Valuation ratios include 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 price/book value ratio provides a way of evaluating whether a stock is relatively cheap or expensive. HAYN's P/B ratio of 1.98 shows that its share price is higher 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. 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
Currently trading at $28.06 per share, American (NYSE:AVD) has fallen 2.2%. So far this morning, 39,484 shares have changed hands. This is 0.2 times the average daily volume. Volume is an important indicator because it indicates how significant a price shift is. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. 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. AVD has a P/E ratio of 28.4, high compared to the industry average of 14.92. 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. A high P/E ratio indicates a stock that is expensive, while a low P/E ratio indicates a stock that is cheap. SEE: Investment Valuation Ratios: Price/Earnings Ratio
Southern (NYSE:SCCO) has increased to a share price of $32.85, a 2% rise. So far today, 826,282 shares have changed hands,. Volume indicates the level of interest that investors have in a company at its current price. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. When used consistently and uniformly, the price/earnings to growth (PEG) ratio is an essential tool that adds dimension to the price/earnings ratio, allows comparisons across diverse industries and is always on the lookout for value. SCCO's PEG ratio is 1.25. 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.
After an increase of 1.9%, Compania de Minas Buenaventura SA (NYSE:BVN) has reached a current price of $34.70. This morning, the company is trading a volume of 176,625 shares. When a stock price moves up or down, watching the volume is a good way of identifying how significant that shift is. 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. For investors primarily interested in the income a stock can generate, the dividend yield is an important determinant of how attractive a stock is. Dividend yield for BVN is 2.3%. 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
Methanex Corporation (Nasdaq:MEOH) has risen 1.9% to hit a current price of $29.72 per share. With 73,329 shares changing hands so far today, the company's volume is 0.4 times its current three-month average. Volume is used to evaluate how meaningful the price movement of a stock is. 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. A price/sales ratio is derived by dividing stock market price by company sales. MEOH's P/S ratio of 0.97 is fairly low. Low P/S ratios are more attractive than high ratios because this indicates that an investor is paying less for each dollar of sales. 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.
The Bottom Line No matter the economic climate, Wall Street will always have stocks that make major moves each week. Daily stock performance should be weighed against historical performance and put in context of the market overall. Keep in mind that all these ratios should be compared against historical numbers and industry information in order to get a more complete picture.
by
Investopedia Staff
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