On a good day for the market, the Nasdaq is up 0.2%, the S&P 500 has moved up 0.2% and the Dow has climbed 0.3%. 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 0.5% on a good day for the market overall. The biggest movers in the sector so far are:
|Company||Market Cap||Percentage Change|
|United Continental Holdings (NYSE:UAL)||$6.02 billion||+5.1%|
|Kirby (NYSE:KEX)||$3.01 billion||+4.8%|
|Costamare (NYSE:CMRE)||$961.4 million||+4.3%|
|Teekay LNG Partners (NYSE:TGP)||$2.59 billion||-4.3%|
|Spirit Airlines (Nasdaq:SAVE)||$1.39 billion||+3%|
|Allegiant Travel (Nasdaq:ALGT)||$1.27 billion||+2.3%|
|Alaska Air Group (NYSE:ALK)||$2.36 billion||+2%|
Forex Broker Summary: UFXMarkets
United Continental Holdings (NYSE:UAL) has increased to a share price of $19.02, a 5.1% rise. The company's volume is currently 2.1 million shares for the day, in keeping with its current daily average. A stock's volume conveys how excited investors are about it. 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 debt-equity (D/E) ratio compares the total liabilities for a company to its total shareholder equity. UAL has a high D/E ratio of 761%. Companies in capital-intensive industries usually have higher D/E ratios because they need to buy more property, plants, and equipment to operate. 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.
After an increase of 4.8%, Kirby (NYSE:KEX) has reached a current price of $56.49. This morning, the company is trading a volume of 298,267 shares. The trading volume for a stock indicates the level of investor interest. 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. As with most ratios, comparisons of company price/earnings to growth ratios (PEG ratios) are most appropriate for similar companies. PEG ratio for KEX is 1.31. 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.
Costamare (NYSE:CMRE) is currently trading at $14.79 per share, a 4.3% increase. With 426,957 shares changing hands so far today, the company's volume is 1.8 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. 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. A company's price/earnings ratio (P/E ratio) provides a measure of how expensive or cheap a stock is. Compared to the industry average of 6.79, CMRE's P/E ratio of 9.9 is quite high. 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. From the investor's perspective, a stock with a lower ratio is relatively cheaper than a stock with a higher ratio. SEE: How To Use The P/E Ratio And PEG To Tell The Future Of A Stock
Slipping 4.3%, Teekay LNG Partners (NYSE:TGP) is currently trading at $38.24 per share. So far today, 1.8 million shares of the company's stock have changed hands. This is greater than yesterday's volume of 170,046 shares. When a stock price moves up or down, watching the volume is a good way of identifying how significant that shift is. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. 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. TGP has a high capitalization ratio of 64.2%. 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. 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.
Spirit Airlines (Nasdaq:SAVE) has risen 3% to hit a current price of $19.69 per share. So far today, the company's volume is 320,487 shares, 0.8 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. Understanding investment valuation ratios allows an investor to assess the true value of an individual stock. If the price/book value ratio of a stock is high, it may indicate that the stock is expensive, while a lower ratio may indicate that the stock is a bargain. SAVE's stock is trading for more than its book value with a P/B ratio of 2.71. This may be a sign that the company is overvalued. To put things in perspective, should be made among companies in the same industry rather than across industries. SEE: How Buybacks Warps The Price-To-Book Ratio
Allegiant Travel (Nasdaq:ALGT) is up 2.3% to reach a current price of $67.31 per share. So far today, the company's volume is 60,379 shares. Volume is an important indicator because it indicates how significant a price shift is. Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. The price/sales ratio measures a company's stock market price by its revenues. The P/S ratio for ALGT is a high 1.56. In young companies, a high P/S ratio is a sign of sales growth that is expected to turn into earnings and cash flow. A limitation of the P/S ratio is that the price component measures only stock market captialization, while sales are a function of the entire capital structure, potentially leading to wide differences between levered and unlevered companies.
Alaska Air Group (NYSE:ALK) has risen 2% and is currently trading at $34.17 per share. So far today, the company's volume is 269,592 shares, consistent with its average over the last three months. Volume indicates the level of interest that investors have in a company at its current price. Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. The debt ratio shows the proportion of assets that a company is financing through debt. ALK has a debt ratio of 76.3%, which is on the high side. This means that most of the company's assets are financed through debt. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.
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. However, these fundamental metrics must be analyzed with historic data, industry information in addition to firm specific financial statements.