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Today's Major Transportation Sector Movers
The Nasdaq is unchanged, the S&P 500 is trading down 0.1% and the Dow has slipped 0.3% after the morning's trading. 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.
The Transportation sector (IYT) has fallen 0.3% despite little change in the market overall. The biggest movers in the sector so far are:
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Currently trading at $15.24 per share, Seaspan (NYSE:SSW) has fallen 3.6%. So far today, 121,255 shares have changed hands. This is 0.7 times its current three-month average. When a stock price moves up or down, watching the volume is a good way of identifying how significant that shift is. Profit-margin ratios help us to keep score, as measured over time, of management's ability to generate profits and manage costs and expenses. There are three key profit-margin ratios: gross profit margin, operating profit margin and net profit margin. SSW has a gross profit margin of 80.2%, which is on the high end. A high gross profit margin generally means that the company can make a reasonable profit on sales, provided that overhead costs do not increase. Net profit margin is calculated by dividing net income by sales. The company's net profit margin is negative. A negative net profit margin means the company spent more money than it made. Operating profit measures how much cash the business throws off, and some consider it a more reliable measure of profitability since it is harder to manipulate with accounting tricks than net earnings. SSW's operating profit margin is 48.9%.
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. 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. SSW has a high capitalization ratio of 72.4%. 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. Prudent use of leverage (debt) increases the financial resources available to a company for growth and expansion.
Increasing 2.8%, Grupo Aeroportuario del Centro (Nasdaq:OMAB) is trading at $16.99 per share. At 6,529 shares, the company's volume so far today is consistent with its current daily average. If a stock price makes a big move up or down, volume lets us know the significance of that move. Margin analysis is a great way to understand the profitability of companies. OMAB's gross profit margin is 60.6%. Value investors, investors in distressed securities, and junk bond investors will probably pay more attention to the operating margin ratio. Operating profit margin for OMAB is 0%. Net profit margin examines how effectively a company is managed and how profitable it is by looking at how much of each dollar in revenues ultimately hits the company's bottom line. Net margin is 22.1%.
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 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. OMAB has a PEG ratio of 5.68. Because of the adjustment for earnings growth rate, the PEG ratio is somewhat more useful than many formulas for comparing companies in different industries.
RailAmerica (NYSE:RA) has fallen 2.5% and is currently trading at $25.56 per share. The company is currently trading a volume of 124,026 shares. High volume indicates a lot of investor interest while low volume indicates the opposite. Margin analysis tells us how effectively management can wring profits from sales and how much room a company has to withstand a downturn, fend off competition and make mistakes. RA's gross profit margin of 79.8% is on the high side. Investors should track gross profit margin ratios over several years in order to see if earnings are consistent, growing or declining. As with other margin ratios, the operating margin is a percentage, which allows for more standardized comparison across time and among different companies of different sizes. The operating profit margin for RA is 22.1%, high compared to its gross profit margin. A high operating margin indicates that a company has a greater ability to pay its fixed costs, which means that the company has greater financial flexibility and a greater margin of error should its business decline. Net profit margin is a good tool for fundamental analysis and long-term investing but is less useful for technical analysts and short-term traders. The company has a negative net profit margin of -1.3%. This shows that the company reported a net loss in the most recent quarter.
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 especially important for value investors as it can provide an indication of the true value of a company's assets at a time when its business model may be failing. The P/B ratio for RA is 2.0, 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. 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
This morning, 681,194 shares have been traded, lighter than yesterday's volume of 955,619 shares. If a stock price moves on high volume, this means that the change is a significant one. There are many tools investors can use to evaluate a stock, including margins. Margins, quite simply, are earnings expressed as a ratio, or a percentage of sales, and this allows investors to compare the profitability of different companies, while net earnings, which are presented as an absolute number, cannot. The gross profit margin for EXPD is 27.5%. Operating margin for EXPD is 8.9% and net margin is 6.1%, both low relative to its gross margin.
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. Dividend yield measures the income that a stock will generate for an investor. EXPD's dividend yield of 1.5% is fairly low. 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: Guide To Stock-Picking Strategies: Income Investing
Con Way (NYSE:CNW) is currently trading at a share price of $34.85, a 1.6% decline. The company is currently trading a volume of 136,680 shares. This is 0.2 times its average volume over the past three months. Volume is an important indicator because it indicates how significant a price shift is. Margin ratios highlight companies that are worth further examination. CNW has a gross profit margin of 61.1%. Relative to its gross profit margin, CNW's operating profit margin of 4.1% and net profit margin of 2% are high.
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/sales ratio measures a company's stock market value by its total revenues or alternatively, a company's price per share by its revenue per share. The P/S ratio for CNW is 0.34, which is relatively 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.
Roadrunner Transportation Systems (NYSE:RRTS) has risen 1.6% to hit a current price of $17.33 per share. So far today, the company's volume is 62,283 shares, 0.7 times the average daily volume. 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 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. Profit-margin ratios help us to keep score, as measured over time, of management's ability to generate profits and manage costs and expenses. There are three key profit-margin ratios: gross profit margin, operating profit margin and net profit margin. RRTS has a low gross profit margin of 17.3%. Investors should track gross profit margin ratios over several years in order to see if earnings are consistent, growing or declining. RRTS has an operating profit margin of 6.3% and a net profit margin of 3.2%, both low compared to its gross profit margin.
Understanding investment valuation ratios allows the investor to assess the true value of an individual stock. The debt ratio gives users a quick measure of the amount of debt that the company has on its balance sheets compared to its assets. The debt ratio for RRTS is a low 45.3%. 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.
Alaska Air Group (NYSE:ALK) is currently trading at $37.51 per share, a 1.5% increase. So far today, 175,149 shares have changed hands. Volume indicates the level of interest that investors have in a company at its current price. Calculating the profit margin is a great way to gain insight into aspects of how well a company generates and retains money. Instead of measuring how much managers earn from assets, equity or invested capital, profit-margin ratios measure how far a company stretches its total revenue or total sales. ALK has a gross profit margin of 47.3%. Operating margin can be an important ratio for some investors, particularly those investing in weaker companies or companies in cyclical industries. ALK's operating profit margin is 7%. Net profit margin compares net income with sales. The company has a net profit margin of 4.8%.
Valuation ratios allow the investor to make a quick determination as to a company's investment value. 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. The D/E ratio for ALK is 85%. 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.
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. 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 Transportation sector (IYT) has fallen 0.3% despite little change in the market overall. The biggest movers in the sector so far are:
| Company | Market Cap | Percentage Change |
| Seaspan Corporation (NYSE:SSW) | $993.2 million | -3.6% |
| Grupo Aeroportuario del Centro Nort(ADR) (Nasdaq:OMAB) | $826 million | +2.8% |
| RailAmerica, Inc. (NYSE:RA) | $1.32 billion | -2.5% |
| Expeditors Intl (Nasdaq:EXPD) | $8 billion | -1.7% |
| Con Way Inc (NYSE:CNW) | $1.98 billion | -1.6% |
| Roadrunner Transportation Systems Inc (NYSE:RRTS) | $525.9 million | +1.6% |
| Alaska Air Group, Inc. (NYSE:ALK) | $2.63 billion | +1.5% |
Currently trading at $15.24 per share, Seaspan (NYSE:SSW) has fallen 3.6%. So far today, 121,255 shares have changed hands. This is 0.7 times its current three-month average. When a stock price moves up or down, watching the volume is a good way of identifying how significant that shift is. Profit-margin ratios help us to keep score, as measured over time, of management's ability to generate profits and manage costs and expenses. There are three key profit-margin ratios: gross profit margin, operating profit margin and net profit margin. SSW has a gross profit margin of 80.2%, which is on the high end. A high gross profit margin generally means that the company can make a reasonable profit on sales, provided that overhead costs do not increase. Net profit margin is calculated by dividing net income by sales. The company's net profit margin is negative. A negative net profit margin means the company spent more money than it made. Operating profit measures how much cash the business throws off, and some consider it a more reliable measure of profitability since it is harder to manipulate with accounting tricks than net earnings. SSW's operating profit margin is 48.9%.
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. 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. SSW has a high capitalization ratio of 72.4%. 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. Prudent use of leverage (debt) increases the financial resources available to a company for growth and expansion.
Increasing 2.8%, Grupo Aeroportuario del Centro (Nasdaq:OMAB) is trading at $16.99 per share. At 6,529 shares, the company's volume so far today is consistent with its current daily average. If a stock price makes a big move up or down, volume lets us know the significance of that move. Margin analysis is a great way to understand the profitability of companies. OMAB's gross profit margin is 60.6%. Value investors, investors in distressed securities, and junk bond investors will probably pay more attention to the operating margin ratio. Operating profit margin for OMAB is 0%. Net profit margin examines how effectively a company is managed and how profitable it is by looking at how much of each dollar in revenues ultimately hits the company's bottom line. Net margin is 22.1%.
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 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. OMAB has a PEG ratio of 5.68. Because of the adjustment for earnings growth rate, the PEG ratio is somewhat more useful than many formulas for comparing companies in different industries.
RailAmerica (NYSE:RA) has fallen 2.5% and is currently trading at $25.56 per share. The company is currently trading a volume of 124,026 shares. High volume indicates a lot of investor interest while low volume indicates the opposite. Margin analysis tells us how effectively management can wring profits from sales and how much room a company has to withstand a downturn, fend off competition and make mistakes. RA's gross profit margin of 79.8% is on the high side. Investors should track gross profit margin ratios over several years in order to see if earnings are consistent, growing or declining. As with other margin ratios, the operating margin is a percentage, which allows for more standardized comparison across time and among different companies of different sizes. The operating profit margin for RA is 22.1%, high compared to its gross profit margin. A high operating margin indicates that a company has a greater ability to pay its fixed costs, which means that the company has greater financial flexibility and a greater margin of error should its business decline. Net profit margin is a good tool for fundamental analysis and long-term investing but is less useful for technical analysts and short-term traders. The company has a negative net profit margin of -1.3%. This shows that the company reported a net loss in the most recent quarter.
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 especially important for value investors as it can provide an indication of the true value of a company's assets at a time when its business model may be failing. The P/B ratio for RA is 2.0, 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. 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
This morning, 681,194 shares have been traded, lighter than yesterday's volume of 955,619 shares. If a stock price moves on high volume, this means that the change is a significant one. There are many tools investors can use to evaluate a stock, including margins. Margins, quite simply, are earnings expressed as a ratio, or a percentage of sales, and this allows investors to compare the profitability of different companies, while net earnings, which are presented as an absolute number, cannot. The gross profit margin for EXPD is 27.5%. Operating margin for EXPD is 8.9% and net margin is 6.1%, both low relative to its gross margin.
Con Way (NYSE:CNW) is currently trading at a share price of $34.85, a 1.6% decline. The company is currently trading a volume of 136,680 shares. This is 0.2 times its average volume over the past three months. Volume is an important indicator because it indicates how significant a price shift is. Margin ratios highlight companies that are worth further examination. CNW has a gross profit margin of 61.1%. Relative to its gross profit margin, CNW's operating profit margin of 4.1% and net profit margin of 2% are high.
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/sales ratio measures a company's stock market value by its total revenues or alternatively, a company's price per share by its revenue per share. The P/S ratio for CNW is 0.34, which is relatively 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.
Roadrunner Transportation Systems (NYSE:RRTS) has risen 1.6% to hit a current price of $17.33 per share. So far today, the company's volume is 62,283 shares, 0.7 times the average daily volume. 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 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. Profit-margin ratios help us to keep score, as measured over time, of management's ability to generate profits and manage costs and expenses. There are three key profit-margin ratios: gross profit margin, operating profit margin and net profit margin. RRTS has a low gross profit margin of 17.3%. Investors should track gross profit margin ratios over several years in order to see if earnings are consistent, growing or declining. RRTS has an operating profit margin of 6.3% and a net profit margin of 3.2%, both low compared to its gross profit margin.
Understanding investment valuation ratios allows the investor to assess the true value of an individual stock. The debt ratio gives users a quick measure of the amount of debt that the company has on its balance sheets compared to its assets. The debt ratio for RRTS is a low 45.3%. 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.
Alaska Air Group (NYSE:ALK) is currently trading at $37.51 per share, a 1.5% increase. So far today, 175,149 shares have changed hands. Volume indicates the level of interest that investors have in a company at its current price. Calculating the profit margin is a great way to gain insight into aspects of how well a company generates and retains money. Instead of measuring how much managers earn from assets, equity or invested capital, profit-margin ratios measure how far a company stretches its total revenue or total sales. ALK has a gross profit margin of 47.3%. Operating margin can be an important ratio for some investors, particularly those investing in weaker companies or companies in cyclical industries. ALK's operating profit margin is 7%. Net profit margin compares net income with sales. The company has a net profit margin of 4.8%.
Valuation ratios allow the investor to make a quick determination as to a company's investment value. 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. The D/E ratio for ALK is 85%. 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.
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. 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
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