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Union Pacific and Other Big Movers In Transportation on September 17, 2012
On a bad day for the market, the Nasdaq is trading down 0.2%, the S&P 500 has slipped 0.2% and the Dow has decreased 0.2%. 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 1.1%, underperforming the market overall. The current biggest movers in the sector are:
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Con Way (NYSE:CNW) is currently trading at a share price of $29.25, a 4.3% decline. The company's volume is currently 331,374 shares for the day, 0.4 times its current daily average. As a stock moves up or down, it is important to pay attention to the trading volume. This indicates the level of interest: the higher the volume, the more the interest. 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/book value ratio is one of the more common methods of determining whether a stock is fairly valued. CNW has a P/B ratio of 1.99 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
After a decline of 3.2%, Allegiant Travel (Nasdaq:ALGT) has hit a share price of $62.40. So far today, the company's volume is 42,182 shares. The trading volume for a stock indicates the level of investor interest. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. 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. ALGT's P/S ratio of 1.56 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.
Currently trading at $81.91 per share, Kansas City (NYSE:KSU) has fallen 2.1%. So far today, 302,411 shares have changed hands, while it was 854,388 shares yesterday. If a stock price moves on high volume, this means that the change is a significant one. 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 price/earnings ratio (P/E ratio) provides a measure of how expensive or cheap a stock is. KSU has a P/E ratio of 23.6, high compared to the industry average of 18.12. Usually, if a stock has a high P/E ratio, it indicates that the market expects the company to grow earnings quickly in the future. High P/E stocks could be "growth" stocks, while low PE stocks may be "value" stocks. SEE: Can Investors Trust the P/E Ratio?
At $48.50, Landstar System (Nasdaq:LSTR) has slipped 1.8%. This morning, the company is trading a volume of 50,838 shares. This is 0.1 times its current three-month average. Volume indicates the level of interest that investors have in a company at its current price. Looking at a company's valuation ratios is a good way of getting a basic idea as to its value as an investment. The debt-equity (D/E) ratio is a leverage ratio. LSTR's debt-equity ratio of 43% is on the low end. 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 is not a pure measurement of a company's debt because it includes operational liabilities in total liabilities.
Golar LNG (Nasdaq:GMLP) is at $32.80 per share after an increase of 1.8%. The company's volume is currently 44,308 shares for the day, consistent with its current daily average. 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 estimating whether a stock price is too high, reasonable or a bargain investment opportunity. The capitalization ratio is calculated by dividing long-term debt by the sum of long-term debt and shareholders' equity. GMLP has a capitalization ratio of 96.2%, which is on the high end. The company may have trouble meeting operating and debt liabilities on time and surviving adverse economic conditions. The capitalization ratio is one of the more meaningful debt ratios because it focuses on the relationship of debt liabilities as a component of a company's total capital base, which is the capital raised by shareholders and lenders.
Air (Nasdaq:AIRM) has risen 1.7% and is currently trading at $120.05 per share. The company is currently trading a volume of 16,285 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. Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. The easy-to-calculate debt ratio is helpful to investors looking for a quick take on the leverage for a company. The debt ratio for AIRM is 68.3%, which is relatively high. This means that the company's cash flow is significantly impacted by paying off principal and interest and that any negative change in performance or rise in interest rates could result in default. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.
Slipping 1.5%, Union Pacific (NYSE:UNP) is currently trading at $126.46 per share. The company's volume is currently 638,435 shares for the day, on pace to finish the day below yesterday's volume of 2.9 million shares. In technical analysis, trading volume is used to determine the strength of a market indicator. 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 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. UNP's PEG ratio of 1.24 is in line 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 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. 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) is down 1.1%, underperforming the market overall. The current biggest movers in the sector are:
| Company | Market Cap | Percentage Change |
| Con Way (NYSE:CNW) | $1.71 billion | -4.3% |
| Allegiant Travel (Nasdaq:ALGT) | $1.24 billion | -3.2% |
| Kansas City (NYSE:KSU) | $9.2 billion | -2.1% |
| Landstar System (Nasdaq:LSTR) | $2.3 billion | -1.8% |
| Golar LNG (Nasdaq:GMLP) | $745.4 million | +1.8% |
| Air (Nasdaq:AIRM) | $1.52 billion | +1.7% |
| Union Pacific (NYSE:UNP) | $60.83 billion | -1.5% |
Con Way (NYSE:CNW) is currently trading at a share price of $29.25, a 4.3% decline. The company's volume is currently 331,374 shares for the day, 0.4 times its current daily average. As a stock moves up or down, it is important to pay attention to the trading volume. This indicates the level of interest: the higher the volume, the more the interest. 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/book value ratio is one of the more common methods of determining whether a stock is fairly valued. CNW has a P/B ratio of 1.99 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
After a decline of 3.2%, Allegiant Travel (Nasdaq:ALGT) has hit a share price of $62.40. So far today, the company's volume is 42,182 shares. The trading volume for a stock indicates the level of investor interest. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. 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. ALGT's P/S ratio of 1.56 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.
Currently trading at $81.91 per share, Kansas City (NYSE:KSU) has fallen 2.1%. So far today, 302,411 shares have changed hands, while it was 854,388 shares yesterday. If a stock price moves on high volume, this means that the change is a significant one. 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 price/earnings ratio (P/E ratio) provides a measure of how expensive or cheap a stock is. KSU has a P/E ratio of 23.6, high compared to the industry average of 18.12. Usually, if a stock has a high P/E ratio, it indicates that the market expects the company to grow earnings quickly in the future. High P/E stocks could be "growth" stocks, while low PE stocks may be "value" stocks. SEE: Can Investors Trust the P/E Ratio?
At $48.50, Landstar System (Nasdaq:LSTR) has slipped 1.8%. This morning, the company is trading a volume of 50,838 shares. This is 0.1 times its current three-month average. Volume indicates the level of interest that investors have in a company at its current price. Looking at a company's valuation ratios is a good way of getting a basic idea as to its value as an investment. The debt-equity (D/E) ratio is a leverage ratio. LSTR's debt-equity ratio of 43% is on the low end. 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 is not a pure measurement of a company's debt because it includes operational liabilities in total liabilities.
Golar LNG (Nasdaq:GMLP) is at $32.80 per share after an increase of 1.8%. The company's volume is currently 44,308 shares for the day, consistent with its current daily average. 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 estimating whether a stock price is too high, reasonable or a bargain investment opportunity. The capitalization ratio is calculated by dividing long-term debt by the sum of long-term debt and shareholders' equity. GMLP has a capitalization ratio of 96.2%, which is on the high end. The company may have trouble meeting operating and debt liabilities on time and surviving adverse economic conditions. The capitalization ratio is one of the more meaningful debt ratios because it focuses on the relationship of debt liabilities as a component of a company's total capital base, which is the capital raised by shareholders and lenders.
Air (Nasdaq:AIRM) has risen 1.7% and is currently trading at $120.05 per share. The company is currently trading a volume of 16,285 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. Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. The easy-to-calculate debt ratio is helpful to investors looking for a quick take on the leverage for a company. The debt ratio for AIRM is 68.3%, which is relatively high. This means that the company's cash flow is significantly impacted by paying off principal and interest and that any negative change in performance or rise in interest rates could result in default. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.
Slipping 1.5%, Union Pacific (NYSE:UNP) is currently trading at $126.46 per share. The company's volume is currently 638,435 shares for the day, on pace to finish the day below yesterday's volume of 2.9 million shares. In technical analysis, trading volume is used to determine the strength of a market indicator. 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 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. UNP's PEG ratio of 1.24 is in line 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 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. 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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