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TRW Automotive and Other Consumer Cyclical Stocks Making Big Moves on October 4, 2012
Currently, the Nasdaq has been relatively flat, the S&P 500 is trading up 0.4% and the Dow has climbed 0.5%. 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.
The biggest movers in the Consumer Cyclical sector (XLY) (+0.6%) are:
Forex Broker Summary: Forex Capital Markets (FXCM)
Sturm, Ruger (NYSE:RGR) is trading at $45.96 per share, down 3.2%. The company's volume is currently 170,619 shares for the day, in keeping with its current three-month average. If a stock price moves on high volume, this means that the change is a significant one. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. The dividend yield is measured by taking the annual dividends per share and dividing that number by the stock price. RGR's dividend yield is 3.2%. High dividend yields are generally more important to value investors, investors in larger companies, and income oriented investors than they are to growth investors, investors in small cap stocks, and investors in new or emerging companies. SEE: Guide To Stock-Picking Strategies: Income Investing
WABCO Holdings (NYSE:WBC) has moved up 2.9% and is currently trading at $59.54 per share. So far today, the company's volume is 211,650 shares. This is on pace to reach yesterday's trading volume of 379,978 shares. 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 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. While measuring a price/earnings ratio (P/E ratio) is a popular valuation technique, the measure cannot be calculated for companies without earnings, so some investors analyze the price/sales ratio. WBC's P/S ratio of 1.27 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. All things being equal, a low P/S ratio is good news for investors, while a very high one can be a warning sign.
After an increase of 2.5%, Steven (Nasdaq:SHOO) has reached a current price of $43.90. So far today, the company's volume is 138,096 shares, 0.3 times the average daily volume. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. 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 easy-to-calculate debt ratio is helpful to investors looking for a quick take on the leverage for a company. SHOO has a low debt ratio of 30.5%. A low debt ratio means the company has more available cash flow. 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.
At $29.57, Shutterfly (Nasdaq:SFLY) has slipped 2.5%. This morning, the company is trading a volume of 237,728 shares. Volume is an important indicator because it indicates how significant a price shift is. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. The price/book value ratio is one of the more common methods of determining whether a stock is fairly valued. The P/B ratio for SFLY is 1.68, 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. 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: Investment Valuation Ratios: Price/Book Value Ratio
Rising 2.3%, Under Armour (NYSE:UA) is currently trading at $56.17 per share. So far today, the company's volume is 482,356 shares, 0.3 times its average over the past three months. High volume indicates a lot of investor interest while low volume indicates the opposite. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. There are generally two price/earnings ratios calculated: the first, called the trailing Price/Earnings ratio, is calculated using the previous years actual earnings; the second, called forward Price/Earnings ratio, is calculated using the next year's estimated earnings. Compared to the industry average of 20.97, UA's P/E ratio of 57.8 is quite high. This could mean that the market is expecting big things over the next few months or years. High P/E stocks could be "growth" stocks, while low PE stocks may be "value" stocks. SEE: Investment Valuation Ratios: Price/Earnings Ratio
TRW Automotive (NYSE:TRW) has risen 2.2% and is currently trading at $48.56 per share. The company's volume is currently 521,829 shares. This is on pace to reach yesterday's trading volume of 1.1 million shares. 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. When used consistently and uniformly, the price/earnings to growth (PEG) ratio is an essential tool that adds dimension to the price/earnings ratio, allows comparisons across diverse industries and is always on the lookout for value. PEG ratio for TRW is consistent with the industry average at 1.08. 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.
Liz Claiborne (NYSE:FNP) has decreased to $10.51 per share, a 2.1% fall. The company's volume is currently 751,778 shares for the day, 0.4 times the current daily average. If a stock price makes a big move up or down, volume lets us know the significance of that move. 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 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. FNP has a high capitalization ratio of 163.1%. 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. 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.
The Bottom Line The nature of the market is such that stocks will have good days and bad days. Daily stock performance should be weighed against historical performance and put in context of the market overall. 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 biggest movers in the Consumer Cyclical sector (XLY) (+0.6%) are:
| Company | Market Cap | Percentage Change |
| Sturm, Ruger (NYSE:RGR) | $910.1 million | -3.2% |
| WABCO Holdings (NYSE:WBC) | $3.7 billion | +2.9% |
| Steven (Nasdaq:SHOO) | $1.96 billion | +2.5% |
| Shutterfly (Nasdaq:SFLY) | $1.09 billion | -2.5% |
| Under Armour (NYSE:UA) | $5.73 billion | +2.3% |
| TRW Automotive (NYSE:TRW) | $5.8 billion | +2.2% |
| Liz Claiborne (NYSE:FNP) | $1.21 billion | -2.1% |
Sturm, Ruger (NYSE:RGR) is trading at $45.96 per share, down 3.2%. The company's volume is currently 170,619 shares for the day, in keeping with its current three-month average. If a stock price moves on high volume, this means that the change is a significant one. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. The dividend yield is measured by taking the annual dividends per share and dividing that number by the stock price. RGR's dividend yield is 3.2%. High dividend yields are generally more important to value investors, investors in larger companies, and income oriented investors than they are to growth investors, investors in small cap stocks, and investors in new or emerging companies. SEE: Guide To Stock-Picking Strategies: Income Investing
WABCO Holdings (NYSE:WBC) has moved up 2.9% and is currently trading at $59.54 per share. So far today, the company's volume is 211,650 shares. This is on pace to reach yesterday's trading volume of 379,978 shares. 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 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. While measuring a price/earnings ratio (P/E ratio) is a popular valuation technique, the measure cannot be calculated for companies without earnings, so some investors analyze the price/sales ratio. WBC's P/S ratio of 1.27 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. All things being equal, a low P/S ratio is good news for investors, while a very high one can be a warning sign.
After an increase of 2.5%, Steven (Nasdaq:SHOO) has reached a current price of $43.90. So far today, the company's volume is 138,096 shares, 0.3 times the average daily volume. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. 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 easy-to-calculate debt ratio is helpful to investors looking for a quick take on the leverage for a company. SHOO has a low debt ratio of 30.5%. A low debt ratio means the company has more available cash flow. 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.
At $29.57, Shutterfly (Nasdaq:SFLY) has slipped 2.5%. This morning, the company is trading a volume of 237,728 shares. Volume is an important indicator because it indicates how significant a price shift is. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. The price/book value ratio is one of the more common methods of determining whether a stock is fairly valued. The P/B ratio for SFLY is 1.68, 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. 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: Investment Valuation Ratios: Price/Book Value Ratio
Rising 2.3%, Under Armour (NYSE:UA) is currently trading at $56.17 per share. So far today, the company's volume is 482,356 shares, 0.3 times its average over the past three months. High volume indicates a lot of investor interest while low volume indicates the opposite. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. There are generally two price/earnings ratios calculated: the first, called the trailing Price/Earnings ratio, is calculated using the previous years actual earnings; the second, called forward Price/Earnings ratio, is calculated using the next year's estimated earnings. Compared to the industry average of 20.97, UA's P/E ratio of 57.8 is quite high. This could mean that the market is expecting big things over the next few months or years. High P/E stocks could be "growth" stocks, while low PE stocks may be "value" stocks. SEE: Investment Valuation Ratios: Price/Earnings Ratio
TRW Automotive (NYSE:TRW) has risen 2.2% and is currently trading at $48.56 per share. The company's volume is currently 521,829 shares. This is on pace to reach yesterday's trading volume of 1.1 million shares. 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. When used consistently and uniformly, the price/earnings to growth (PEG) ratio is an essential tool that adds dimension to the price/earnings ratio, allows comparisons across diverse industries and is always on the lookout for value. PEG ratio for TRW is consistent with the industry average at 1.08. 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.
Liz Claiborne (NYSE:FNP) has decreased to $10.51 per share, a 2.1% fall. The company's volume is currently 751,778 shares for the day, 0.4 times the current daily average. If a stock price makes a big move up or down, volume lets us know the significance of that move. 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 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. FNP has a high capitalization ratio of 163.1%. 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. 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.
The Bottom Line The nature of the market is such that stocks will have good days and bad days. Daily stock performance should be weighed against historical performance and put in context of the market overall. 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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