Free Annual Reports
Today's Major Capital Goods Sector Movers: Cummins and More
So far today, the Nasdaq is trading up 0.4%, the S&P 500 has been relatively flat and the Dow is unchanged. The capital goods sector is the category of stocks related to the manufacture or distribution of goods. The sector is diverse, containing companies that manufacture machinery used to create capital goods, electrical equipment, aerospace and defense, engineering and construction projects. It is also referred to as the "industrials sector". Performance in the capital goods sector is sensitive to fluctuations in the business cycle. Because it relies heavily on manufacturing, the sector does well when the economy is booming or expanding. As economic conditions worsen, the demand for capital goods drops off, usually lowering the prices of stocks in the sector.
The Capital Goods sector (XLI) has risen 0.3% so far today and here are its biggest movers:
Beginner's Guide To NinjaTrader Trading Software
After rising 9.1%, Harsco (NYSE:HSC) is currently trading at a share price of $22.25. This morning, the company is trading a volume of 344,276 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. Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. The easy-to-calculate debt ratio is helpful to investors looking for a quick take on the leverage for a company. HSC has a high debt ratio of 65.6%. This means that the company's cash flow is significantly impacted by paying off principal and interest and that any negative change in performance or rise in interest rates could result in default. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.
At $10.08, Louisiana-Pacific (NYSE:LPX) has slipped 8.4%. This morning, 3.9 million shares have been traded,. Volume is an important indicator because it indicates how significant a price shift 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. The debt-equity (D/E) ratio compares the total liabilities for a company to its total shareholder equity. LPX's D/E ratio is 74%. 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.
Shaw Group (NYSE:SHAW) has fallen 8.4% and is currently trading at $38.00 per share. This morning, the company's volume is 7.3 million shares. This is 1.6 times the current daily average. If a stock price makes a big move up or down, volume lets us know the significance of that move. 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 is calculated by dividing long-term debt by the sum of long-term debt and shareholders' equity. The capitalizion ratio of 0.6% is on the low end. A very low capitalization ratio might be a sign that the company is stagnating and reducing the potential earnings for shareholders. A low level of debt and a healthy proportion of equity in a company's capital structure is an indication of financial fitness.
Rising 7.6%, Cummins (NYSE:CMI) is currently trading at $97.32 per share. At 2.7 million shares, the company's volume so far today is 1.1 times 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. One of the most important estimates of stock market valuation is the price/earnings ratio (P/E ratio). CMI's P/E ratio is 8.9. A high P/E ratio indicates a stock that is expensive, while a low P/E ratio indicates a stock that is cheap. SEE: How To Use The P/E Ratio And PEG To Tell The Future Of A Stock
Flowserve (NYSE:FLS) has risen 4.6% and is currently trading at $121.13 per share. The company is currently trading a volume of 454,386 shares. If a stock price moves on high volume, this means that the change is a significant one. Valuation ratios allow the investor to make a quick determination as to a company's investment value. As with most ratios, comparisons of company price/earnings to growth ratios (PEG ratios) are most appropriate for similar companies. FLS' PEG ratio is 1.74. 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 a decline of 4.4%, CRH PLC (NYSE:CRH) has hit a share price of $18.32. At 34,885 shares, the company's volume so far today is while it was 170,186 shares yesterday. In technical analysis, trading volume is used to determine the strength of a market indicator. 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. CRH's stock is trading for less than its book value as can be seen from it's P/B value of 0.97. This is due to one of two possibilities: that the stock is being unfairly or incorrectly undervalued by investors because of some transitory circumstance and represents an attractive buying opportunity at a bargain price or that the market's low opinion and valuation of the company are correct, at least over the foreseeable future. P/B has its shortcomings but is still widely used as a valuation metric, more relevant for use by investors looking at capital-intensive or finance-related businesses, such as banks; book value does not carry much meaning for service-based firms with few tangible assets. SEE: Investment Valuation Ratios: Price/Book Value Ratio
Increasing 4%, Embraer SA (NYSE:ERJ) is trading at $26.23 per share. The company's volume for the day so far is 521,007 shares. This is 0.3 times its average daily volume. High volume indicates a lot of investor interest while low volume indicates the opposite. Investment valuation ratios can be very useful in estimating whether a stock price is too high, reasonable or a bargain investment opportunity. The dividend yield is measured by taking the annual dividends per share and dividing that number by the stock price. ERJ has a low dividend yield of 1.4%. If you are an income investor, this stock may not be attractive to you. For income-oriented investors such as retirees, a stock with a high dividend yield may be more attractive than a stock with a low dividend yield. SEE: Guide To Stock-Picking Strategies: Income Investing
The Bottom Line No matter the economic climate, Wall Street will always have stocks that make major moves each week. 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.
The Capital Goods sector (XLI) has risen 0.3% so far today and here are its biggest movers:
| Company | Market Cap | Percentage Change |
| Harsco Corporation (NYSE:HSC) | $1.64 billion | +9.1% |
| Louisiana-Pacific Corporation (NYSE:LPX) | $1.51 billion | -8.4% |
| The Shaw Group Inc. (NYSE:SHAW) | $2.74 billion | -8.4% |
| Cummins (NYSE:CMI) | $17.39 billion | +7.6% |
| Flowserve (NYSE:FLS) | $6.33 billion | +4.6% |
| CRH PLC (ADR) (NYSE:CRH) | $13.59 billion | -4.4% |
| Embraer SA (ADR) (NYSE:ERJ) | $4.67 billion | +4% |
After rising 9.1%, Harsco (NYSE:HSC) is currently trading at a share price of $22.25. This morning, the company is trading a volume of 344,276 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. Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. The easy-to-calculate debt ratio is helpful to investors looking for a quick take on the leverage for a company. HSC has a high debt ratio of 65.6%. This means that the company's cash flow is significantly impacted by paying off principal and interest and that any negative change in performance or rise in interest rates could result in default. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.
At $10.08, Louisiana-Pacific (NYSE:LPX) has slipped 8.4%. This morning, 3.9 million shares have been traded,. Volume is an important indicator because it indicates how significant a price shift 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. The debt-equity (D/E) ratio compares the total liabilities for a company to its total shareholder equity. LPX's D/E ratio is 74%. 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.
Shaw Group (NYSE:SHAW) has fallen 8.4% and is currently trading at $38.00 per share. This morning, the company's volume is 7.3 million shares. This is 1.6 times the current daily average. If a stock price makes a big move up or down, volume lets us know the significance of that move. 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 is calculated by dividing long-term debt by the sum of long-term debt and shareholders' equity. The capitalizion ratio of 0.6% is on the low end. A very low capitalization ratio might be a sign that the company is stagnating and reducing the potential earnings for shareholders. A low level of debt and a healthy proportion of equity in a company's capital structure is an indication of financial fitness.
Rising 7.6%, Cummins (NYSE:CMI) is currently trading at $97.32 per share. At 2.7 million shares, the company's volume so far today is 1.1 times 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. One of the most important estimates of stock market valuation is the price/earnings ratio (P/E ratio). CMI's P/E ratio is 8.9. A high P/E ratio indicates a stock that is expensive, while a low P/E ratio indicates a stock that is cheap. SEE: How To Use The P/E Ratio And PEG To Tell The Future Of A Stock
Flowserve (NYSE:FLS) has risen 4.6% and is currently trading at $121.13 per share. The company is currently trading a volume of 454,386 shares. If a stock price moves on high volume, this means that the change is a significant one. Valuation ratios allow the investor to make a quick determination as to a company's investment value. As with most ratios, comparisons of company price/earnings to growth ratios (PEG ratios) are most appropriate for similar companies. FLS' PEG ratio is 1.74. 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 a decline of 4.4%, CRH PLC (NYSE:CRH) has hit a share price of $18.32. At 34,885 shares, the company's volume so far today is while it was 170,186 shares yesterday. In technical analysis, trading volume is used to determine the strength of a market indicator. 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. CRH's stock is trading for less than its book value as can be seen from it's P/B value of 0.97. This is due to one of two possibilities: that the stock is being unfairly or incorrectly undervalued by investors because of some transitory circumstance and represents an attractive buying opportunity at a bargain price or that the market's low opinion and valuation of the company are correct, at least over the foreseeable future. P/B has its shortcomings but is still widely used as a valuation metric, more relevant for use by investors looking at capital-intensive or finance-related businesses, such as banks; book value does not carry much meaning for service-based firms with few tangible assets. SEE: Investment Valuation Ratios: Price/Book Value Ratio
Increasing 4%, Embraer SA (NYSE:ERJ) is trading at $26.23 per share. The company's volume for the day so far is 521,007 shares. This is 0.3 times its average daily volume. High volume indicates a lot of investor interest while low volume indicates the opposite. Investment valuation ratios can be very useful in estimating whether a stock price is too high, reasonable or a bargain investment opportunity. The dividend yield is measured by taking the annual dividends per share and dividing that number by the stock price. ERJ has a low dividend yield of 1.4%. If you are an income investor, this stock may not be attractive to you. For income-oriented investors such as retirees, a stock with a high dividend yield may be more attractive than a stock with a low dividend yield. SEE: Guide To Stock-Picking Strategies: Income Investing
The Bottom Line No matter the economic climate, Wall Street will always have stocks that make major moves each week. 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.
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
