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Today's Major Transportation Sector Movers: HUBG and More
This morning's trading has marked a bad day for the market so far. The Nasdaq is trading down 0.7%; the S&P 500 has fallen 0.7%; and the Dow has declined 0.8%. 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) is down 1.3%, underperforming the market overall. The current biggest movers in the sector are:
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Hub Group (Nasdaq:HUBG) is down 8.9% to reach $29.04 per share. This morning, 570,572 shares have been traded, more than yesterday's 238,194 shares. 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. 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 capitalization ratio is calculated by dividing long-term debt by the sum of long-term debt and shareholders' equity. The capitalizion ratio of 4.8% 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. 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.
Forward (Nasdaq:FWRD) has moved up 7.4% and is currently trading at $34.29 per share. This morning, the company's volume is 67,806 shares. This is 0.9 times the current daily average. In technical analysis, trading volume is used to determine the strength of a market indicator. Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. The dividend yield is measured by taking the annual dividends per share and dividing that number by the stock price. FWRD has a low dividend yield of 0.9%. If you are an income investor, this stock may not be attractive to you. 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: Due Diligence On Dividends
Rising 5.8%, Swift Transportation (NYSE:SWFT) is currently trading at $8.42 per share. At 3.1 million shares, the company's volume so far today is 1.4 times its current three-month average. The trading volume for a stock indicates the level of investor interest. 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 price/earnings to growth (PEG) ratio can reveal value what price/earnings (P/E) ratios alone may not so that if a company has a high P/E ratio (an indication that its stock is overpriced) but its earnings are growing very quickly, the PEG ratio may reveal that the company is actually fairly valued, or perhaps even a bargain. PEG ratio for SWFT is consistent with the industry average at 0.78. 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.
Falling 3.6%, Atlas Air Worldwide Holdings (Nasdaq:AAWW) is currently at a share price of $45.15. So far today, the company's volume is 65,570 shares. 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/book value ratio provides a way of evaluating whether a stock is relatively cheap or expensive. The P/B ratio for AAWW is 1.04, indicating that the stock is trading for more than its book value. This may be a sign that the company is overvalued. 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
Slipping 2.6%, Union Pacific (NYSE:UNP) is currently trading at $119.62 per share. So far today, the company's volume is 1.7 million shares, lighter than yesterday's volume of 5.5 million shares. Volume is an important indicator because it indicates how significant a price shift is. Understanding investment valuation ratios allows an investor to assess the true value of an individual stock. Perhaps one of the most widely-used stock analysis tools is the price-to-earnings ratio, or P/E. UNP has a P/E ratio of 16.4, in line with the industry average. From the investor's perspective, a stock with a lower ratio is relatively cheaper than a stock with a higher ratio. SEE: Understanding The P/E Ratio
At $74.95, Copa Holdings (NYSE:CPA) has slipped 2.4%. The company's volume for the morning is 173,101 shares. This is 0.4 times the average daily volume. When a stock price moves up or down, watching the volume is a good way of identifying how significant that shift is. 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 price/sales ratio is derived by dividing stock market price by company sales. CPA's P/S ratio of 2.42 is on the high side. In young companies, a high P/S ratio is a sign of sales growth that is expected to turn into earnings and cash flow. It is important to compare P/S ratios for companies in the same industry, as ratios can vary quite widely for companies in different industries.
Allegiant Travel (Nasdaq:ALGT) has decreased to $70.30 per share, a 2.1% fall. The company's volume is currently 36,419 shares for the day, 0.2 times its average over the past three months. If a stock price moves on high volume, this means that the change is a significant one. 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. ALGT has a PEG ratio of 0.85, which is consistent 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. It is important to weigh current activity against historical performance when making any investment decisions. 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 Transportation sector (IYT) is down 1.3%, underperforming the market overall. The current biggest movers in the sector are:
| Company | Market Cap | Percentage Change |
| Hub Group Inc (Nasdaq:HUBG) | $1.2 billion | -8.9% |
| Forward Air Corporation (Nasdaq:FWRD) | $929 million | +7.4% |
| Swift Transportation Company (NYSE:SWFT) | $1.11 billion | +5.8% |
| Atlas Air Worldwide Holdings, Inc. (Nasdaq:AAWW) | $1.24 billion | -3.6% |
| Union Pacific (NYSE:UNP) | $58.47 billion | -2.6% |
| Copa Holdings, S.A. (NYSE:CPA) | $3.4 billion | -2.4% |
| Allegiant Travel Company (Nasdaq:ALGT) | $1.38 billion | -2.1% |
Hub Group (Nasdaq:HUBG) is down 8.9% to reach $29.04 per share. This morning, 570,572 shares have been traded, more than yesterday's 238,194 shares. 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. 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 capitalization ratio is calculated by dividing long-term debt by the sum of long-term debt and shareholders' equity. The capitalizion ratio of 4.8% 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. 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.
Forward (Nasdaq:FWRD) has moved up 7.4% and is currently trading at $34.29 per share. This morning, the company's volume is 67,806 shares. This is 0.9 times the current daily average. In technical analysis, trading volume is used to determine the strength of a market indicator. Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. The dividend yield is measured by taking the annual dividends per share and dividing that number by the stock price. FWRD has a low dividend yield of 0.9%. If you are an income investor, this stock may not be attractive to you. 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: Due Diligence On Dividends
Rising 5.8%, Swift Transportation (NYSE:SWFT) is currently trading at $8.42 per share. At 3.1 million shares, the company's volume so far today is 1.4 times its current three-month average. The trading volume for a stock indicates the level of investor interest. 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 price/earnings to growth (PEG) ratio can reveal value what price/earnings (P/E) ratios alone may not so that if a company has a high P/E ratio (an indication that its stock is overpriced) but its earnings are growing very quickly, the PEG ratio may reveal that the company is actually fairly valued, or perhaps even a bargain. PEG ratio for SWFT is consistent with the industry average at 0.78. 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.
Falling 3.6%, Atlas Air Worldwide Holdings (Nasdaq:AAWW) is currently at a share price of $45.15. So far today, the company's volume is 65,570 shares. 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/book value ratio provides a way of evaluating whether a stock is relatively cheap or expensive. The P/B ratio for AAWW is 1.04, indicating that the stock is trading for more than its book value. This may be a sign that the company is overvalued. 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
Slipping 2.6%, Union Pacific (NYSE:UNP) is currently trading at $119.62 per share. So far today, the company's volume is 1.7 million shares, lighter than yesterday's volume of 5.5 million shares. Volume is an important indicator because it indicates how significant a price shift is. Understanding investment valuation ratios allows an investor to assess the true value of an individual stock. Perhaps one of the most widely-used stock analysis tools is the price-to-earnings ratio, or P/E. UNP has a P/E ratio of 16.4, in line with the industry average. From the investor's perspective, a stock with a lower ratio is relatively cheaper than a stock with a higher ratio. SEE: Understanding The P/E Ratio
At $74.95, Copa Holdings (NYSE:CPA) has slipped 2.4%. The company's volume for the morning is 173,101 shares. This is 0.4 times the average daily volume. When a stock price moves up or down, watching the volume is a good way of identifying how significant that shift is. 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 price/sales ratio is derived by dividing stock market price by company sales. CPA's P/S ratio of 2.42 is on the high side. In young companies, a high P/S ratio is a sign of sales growth that is expected to turn into earnings and cash flow. It is important to compare P/S ratios for companies in the same industry, as ratios can vary quite widely for companies in different industries.
Allegiant Travel (Nasdaq:ALGT) has decreased to $70.30 per share, a 2.1% fall. The company's volume is currently 36,419 shares for the day, 0.2 times its average over the past three months. If a stock price moves on high volume, this means that the change is a significant one. 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. ALGT has a PEG ratio of 0.85, which is consistent 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. It is important to weigh current activity against historical performance when making any investment decisions. 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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