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Tickers in this Article: NAV, KORS, TPX, TSLA, RL, COLM, BWA
The market is on the rise this morning. The Nasdaq has increased 1%; the S&P 500 has climbed 0.5%; and the Dow is trading up 0.6%. The consumer cyclical sector is a category of stocks that relies heavily on the business cycle and economic conditions. Consumer cyclicals include industries such as automotive, housing, entertainment and retail. The category can be further divided into durable and non-durable sections. Durable cyclicals include physical goods such as hardware or vehicles, while non-durables represent items like movies or hotel services. The performance of consumer cyclicals is highly related to the state of the economy. They represent goods and services that are not considered necessities, but luxurious purchases. During contractions or recessions, people have less disposable income to spend on consumer cyclicals. When the economy is expanding or booming, the sales of these goods rise as retail and leisure spending increase.

Underperforming the market overall, the Consumer Cyclical sector (XLY) is up 0.5%, and these are its current biggest movers:
CompanyMarket CapPercentage Change
Navistar International Corporation (NYSE:NAV)$1.53 billion+6.7%
Michael Kors Holdings Ltd (NYSE:KORS)$7.94 billion+4.7%
Tempur-Pedic International Inc. (NYSE:TPX)$1.72 billion+4.1%
Tesla Motors Inc (Nasdaq:TSLA)$2.88 billion+3.9%
Polo Ralph Lauren (NYSE:RL)$8.82 billion+3.2%
Columbia Sportswear Company (Nasdaq:COLM)$1.76 billion+2.6%
BorgWarner Inc. (NYSE:BWA)$7.55 billion+2.3%
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Navistar (NYSE:NAV) has risen 6.7% and is currently trading at $23.90 per share. So far today, the company's volume is 921,819 shares, in keeping with its current three-month average. 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. The P/E ratio for NAV is 1.3, below the industry average of 9.18. 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. 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

Michael Kors (NYSE:KORS) has risen 4.7% to hit a current price of $43.14 per share. The company's volume is currently 1.4 million shares. This is on pace to reach yesterday's trading volume of three million shares. If a stock price moves on high volume, this means that the change is a significant one. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. The debt ratio shows the proportion of assets that a company is financing through debt. KORS has a debt ratio of 32.4%, which is fairly low. 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.

Rising 4.1%, Tempur-Pedic International (NYSE:TPX) is currently trading at $30.04 per share. So far today, the company's volume is 784,448 shares, 0.3 times the current daily 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. Valuation ratios allow the investor to make a quick determination as to a company's investment value. The price/sales ratio measures a company's stock market price by its revenues. The P/S ratio for TPX is a high 1.02. 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.

Increasing 3.9%, Tesla Motors (Nasdaq:TSLA) is trading at $28.32 per share. So far today, 513,707 shares have changed hands. Volume is an important indicator because it indicates how significant a price shift is. 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. 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. TSLA's capitalization ratio of 87.4% is relatively 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.

Polo Ralph Lauren (NYSE:RL) has moved up 3.2% and is currently trading at $150.38 per share. With 580,226 shares changing hands so far today, the company's volume is in keeping with the average volume over the past three months. When a stock price moves up or down, watching the volume is a good way of identifying how significant that shift is. Understanding investment valuation ratios allows an investor to assess the true value of an individual stock. To a large degree, the debt-equity (D/E) ratio provides another vantage point on a company's leverage position, in this case, comparing total liabilities to shareholders' equity, as opposed to total assets in the debt ratio. RL has a low debt-equity ratio of 8%. 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 percentage provides a much more dramatic perspective on a company's leverage position than the debt ratio percentage.

After an increase of 2.6%, Columbia Sportswear (Nasdaq:COLM) has reached a current price of $53.40. The company is trading at a volume of 50,882 shares. This is on pace to fall short of yesterday's volume of 154,522 shares. A stock's volume conveys how excited investors are about it. 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. Using price/earnings ratios (P/E ratios) does not give an indication of whether or not an individual company's ratio is reasonable, a shortcoming that can be corrected by using the price/earnings to growth ratio (PEG ratio). COLM has a PEG ratio of 1.33, which is consistent with the industry average. 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.

BorgWarner (NYSE:BWA) has increased to a share price of $67.47, a 2.3% rise. At 345,548 shares, the company's volume so far today is 0.2 times its current daily average. In technical analysis, trading volume is used to determine the strength of a market indicator. A company's investment value can be 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 price/book value ratio is calculated by dividing the current stock price by the company's book value per share. BWA has a P/B ratio of 2.69 which shows that its share price is higher than its book value. It is important to take the company's debt into account when using the P/B ratio as debt can boost a company's liabilities to the point where they wipe out much of the book value of its hard assets, creating artificially high P/B values. To put things in perspective, should be made among companies in the same industry rather than across industries. SEE: Using The Price-To-Book Ratio To Evaluate Companies

The Bottom Line The nature of the market is such that stocks will have good days and bad days. 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.

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