Filed Under: ,
Tickers in this Article: GDI, LEN.B, NDSN, SXI, IR, SHS, TOL
The Nasdaq is trading down 0.7%, the S&P 500 has fallen 0.7% and the Dow has slipped 0.8%, marking a bad morning for the market. 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) is down 0.7%, underperforming the market overall. The current biggest movers in the sector are:
CompanyMarket CapPercentage Change
Gardner Denver, Inc. (NYSE:GDI)$2.46 billion+9.2%
Lennar Corporation (NYSE:LEN.B)$733.4 million+3.8%
Nordson Corporation (Nasdaq:NDSN)$3.41 billion-3.4%
Standex Int\x27l Corp. (NYSE:SXI)$573 million-3.3%
Ingersoll-Rand (NYSE:IR)$12.39 billion-3.3%
Sauer-Danfoss Inc. (NYSE:SHS)$1.76 billion-3.1%
Toll Brothers, Inc. (NYSE:TOL)$4.93 billion+3.1%
Beginner's Guide To NinjaTrader Trading Software

Gardner Denver (NYSE:GDI) has increased to a share price of $53.69, a 9.2% rise. The company's volume is currently 1.6 million shares for the day, 1.5 times the average daily volume. Volume indicates the level of interest that investors have in a company at its current price. Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. Dividend yield is a way to measure how much cash flow you are getting for each dollar invested in an equity position - in other words, how much "bang for your buck" you are getting from dividends. GDI has a dividend yield of 0.4%, which is fairly low. A company with a low dividend yield may be a safer investment in the long run. 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: Dividend Yield For The Downturn

Rising 3.8%, Lennar (NYSE:LEN.B) is currently trading at $24.33 per share. This morning, the company is trading a volume of 38,901 shares. Volume is an important indicator because it indicates how significant a price shift is. Valuation ratios allow the investor to make a quick determination as to a company's investment value. Dividend yield measures the income that a stock will generate for an investor. The dividend yield for LEN.B is 0.7%, which is on the low end. This may indicate that the company's stock is overpriced. A stock's dividend yield depends on the nature of a company's business, its posture in the marketplace (value or growth oriented), its earnings and cash flow, and its dividend policy. SEE: Investment Valuation Ratios: Dividend Yield

Slipping 3.4%, Nordson (Nasdaq:NDSN) is currently trading at $51.29 per share. With 115,165 shares changing hands so far today, the company's volume is 0.4 times the average volume over the last three months. 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. Investment valuation ratios can be very useful in estimating whether a stock price is too high, reasonable or a bargain investment opportunity. A price/sales ratio is derived by dividing stock market price by company sales. NDSN's P/S ratio of 2.82 is on the high side. This could be a good sign if the share price increases. 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.

Falling 3.3%, Standex (NYSE:SXI) is currently at a share price of $43.91. The company's volume is currently 24,337 shares. This is on pace to reach yesterday's trading volume of 47,972 shares. 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 debt ratio measures the leverage of a company, and a company's leverage is a good way to assess risk. The debt ratio for SXI is a low 43.4%. This indicates that the company engages in conservative financing with opportunities to borrow in the future at no significant risk. 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.

Ingersoll-Rand (NYSE:IR) is trading at $40.12 per share, down 3.3%. The company's volume is currently 2.7 million shares for the day, 0.9 times the average daily volume. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. One of the most important estimates of stock market valuation is the price/earnings ratio (P/E ratio). The P/E ratio for IR is 26.9, below the industry average of 29.41. 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. To determine the P/E ratio, an investor divides the market price of the stock by the earnings-per-share (EPS) of the stock. SEE: The P/E Ratio: A Good Market-Timing Indicator

Sauer-Danfoss (NYSE:SHS) has decreased to $35.22 per share, a 3.1% fall. So far today, 23,185 shares have changed hands. 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 provide investors with an estimation, albeit a simplistic one, of the value of a stock. 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. SHS' capitalization ratio is 26.6%, which is relatively low. Investors generally consider a company with low debt and high equity levels is a good quality investment. This ratio is considered to be one of the more meaningful of the "debt" ratios - it delivers the key insight into the use of leverage by a company.

Toll Brothers, Inc (NYSE:TOL) has moved up 3.1% and is currently trading at $30.32 per share. The company's volume for the day so far is 2.1 million shares, 0.7 times the 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. The price/earnings to growth (PEG) ratio compares a company's P/E ratio to its earnings-per-share growth rate, which tells you whether or not you are getting a good value when purchasing a stock with a high price/earnings ratio (P/E ratio). TOL's PEG ratio of 3.05 is in line with the industry average. Because of the adjustment for earnings growth rate, the PEG ratio is somewhat more useful than many formulas for comparing companies in different industries.

The Bottom Line On any given day, a particular stock may see positive or negative change in its share price. 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.

comments powered by Disqus

Trading Center