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Tickers in this Article: SLCA, TITN, TDG, ACM, GDI, NC, URS
So far today, the Nasdaq has risen 0.2%, the S&P 500 remains relatively unchanged and the Dow has fallen 0.2%. 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 biggest movers in the Capital Goods sector (XLI) (+0.2%) are:
CompanyMarket CapPercentage Change
US Silica Holdings (NYSE:SLCA)3.7 million-4.7%
Titan Machinery (Nasdaq:TITN)5.8 million-4.4%
TransDigm Group (NYSE:TDG).81 billion+3%
AECOM (NYSE:ACM).2 billion-2.2%
Gardner Denver (NYSE:GDI).02 billion-1.9%
NACCO Industries (NYSE:NC)7.1 million-1.8%
URS (NYSE:URS).98 billion-1.6%
Forex Broker Summary: UFXMarkets

Falling 4.7%, US Silica Holdings (NYSE:SLCA) is currently at a share price of $12.31. The company's volume for the day so far is 428,958 shares. The trading volume for a stock indicates the level of investor interest. 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 ratio gives users a quick measure of the amount of debt that the company has on its balance sheets compared to its assets. SLCA's debt ratio of 67.7% is fairly high. This might mean that the company now has low borrowing capacity, which reduces it's financial flexibility. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.

At $27.64, Titan Machinery (Nasdaq:TITN) has slipped 4.4%. So far today, 168,028 shares have changed hands,. High volume indicates a lot of investor interest while low volume indicates the opposite. 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. In a nutshell, the price/sales ratio shows how much Wall Street values every dollar of the company's sales. TITN has a P/S ratio of 0.42, on the low end. Low P/S ratios can indicate unrecognized value potential - so long as other criteria like high profit margins, low debt levels and growth prospects are in place. All things being equal, a low P/S ratio is good news for investors, while a very high one can be a warning sign.

TransDigm Group (NYSE:TDG) is currently trading at $136.33 per share, a 3% increase. This morning, the company's volume is 411,032 shares. This is 1.1 times the current daily average. In technical analysis, trading volume is used to determine the strength of a market indicator. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. The price/book value ratio provides a way of evaluating whether a stock is relatively cheap or expensive. TDG has a P/B ratio of 6.34 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. A weakness of the P/B value ratio is that while the price component is easily determined by looking at the stock quote, the book value component is more difficult to estimate and more open to individual interpretation and analysis. SEE: How Buybacks Warps The Price-To-Book Ratio

AECOM (NYSE:ACM) has fallen 2.2% and is currently trading at $19.03 per share. The company's volume for the day so far is 450,180 shares, 0.3 times the average volume over the last three months. If a stock price moves on high volume, this means that the change is a significant one. 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 capitalization ratio measures the debt component of the capital structure, or capitalization of a company (i.e., the sum of long-term debt liabilities and shareholder equity) to support operations and growth. ACM has a low capitalization ratio of 27.9%. Investors generally consider a company with low debt and high equity levels is a good quality investment. A low level of debt and a healthy proportion of equity in a company's capital structure is an indication of financial fitness.

After a decline of 1.9%, Gardner Denver (NYSE:GDI) has hit a share price of $60.48. So far today, the company's volume is 282,084 shares. If a stock price makes a big move up or down, volume lets us know the significance of that move. 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 price/earnings ratio is calculated by taking a stock price and dividing it by the earnings-per-share (EPS). GDI's P/E ratio of 10.9 falls below the industry average of 14.3. 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. High P/E stocks could be "growth" stocks, while low PE stocks may be "value" stocks. SEE: Can Investors Trust the P/E Ratio?

NACCO Industries (NYSE:NC) has decreased to $105.05 per share, a 1.8% fall. So far today, the company's volume is 2,268 shares, on pace to finish the day below yesterday's volume of 10,958 shares. If a stock is trading on low volume, then there is not much interest in the stock. On the other hand, if a stock is trading on high volume, then there is a lot of interest in the stock. 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 easy-to-calculate debt ratio is helpful to investors looking for a quick take on the leverage for a company. NC has a high debt ratio of 63.9%. As such, the company is highly leveraged and not highly liquid. 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.

URS (NYSE:URS) is currently trading at a share price of $38.15, a 1.6% decline. So far this morning, 207,411 shares have changed hands. This is 0.3 times its average daily volume. 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. 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. The dividend yield is measured by taking the annual dividends per share and dividing that number by the stock price. Dividend yield for URS is 2.1%. It is important to remember that while a higher dividend yield is more attractive, all else being equal, a higher dividend yield can also indicate greater perceived risk. SEE: Investment Valuation Ratios: Dividend Yield

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. 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.

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