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Tickers in this Article: ACO, SPG, MKTAY, CMI, GTLS, CAT, UTX
The market has been slipping so far today. The Nasdaq has declined 0.3%; the S&P 500 has decreased 0.3%; and the Dow is down 0.1%. 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 Capital Goods sector (XLI) is currently lagging behind the overall market, down 1.2%, and its current biggest movers are:
CompanyMarket CapPercentage Change
AMCOL (NYSE:ACO)$1.14 billion-3.5%
Simon Property Group (NYSE:SPG)$49.05 billion-3.4%
Makita Corporation (Nasdaq:MKTAY)$5.28 billion-3.3%
Cummins (NYSE:CMI)$18.86 billion-2.9%
Chart Industries (Nasdaq:GTLS)$2.18 billion-1.8%
Caterpillar (NYSE:CAT)$60.8 billion-1.7%
United Technologies (NYSE:UTX)$74.29 billion-1.7%
Broker Summary: TD Ameritrade Thinkorswim

AMCOL (NYSE:ACO) has fallen 3.5% and is currently trading at $34.55 per share. The company is trading at a volume of 60,937 shares. This is a sign that there will be less trading activity than there was yesterday. Volume is an important indicator because it indicates how significant a price shift is. 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 debt ratio is calculated by dividing total liabilities by total assets. ACO's debt ratio is 51.7%. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.

Simon Property Group (NYSE:SPG) has decreased to $155.19 per share, a 3.4% fall. So far today, the company's volume is 2.1 million shares, 1.7 times its average over the past three months. 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. 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 debt-equity (D/E) ratio is a measurement of how much suppliers, lenders, creditors and obligors have committed to the company versus what the shareholders have committed. SPG has a high D/E ratio of 381%. This shows that the company's assets are financed primarily through debt. The D/E ratio percentage provides a much more dramatic perspective on a company's leverage position than the debt ratio percentage.

Slipping 3.3%, Makita Corporation (Nasdaq:MKTAY) is currently trading at $37.06 per share. So far today, the company's volume is 1,357 shares. The trading volume for a stock indicates the level of investor interest. Valuation ratios allow the investor to make a quick determination as to a company's investment value. In a nutshell, the price/sales ratio shows how much Wall Street values every dollar of the company's sales. MKTAY has a high P/S ratio of 1.34. 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.

Cummins (NYSE:CMI) is currently trading at a share price of $96.34, a 2.9% decline. So far today, the company's volume is 1.3 million shares, 0.6 times the average daily volume. If a stock price makes a big move up or down, volume lets us know the significance of that move. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. The price/earnings ratio is calculated by taking a stock price and dividing it by the earnings-per-share (EPS). P/E ratio for CMI is 9.9. To determine the P/E ratio, an investor divides the market price of the stock by the earnings-per-share (EPS) of the stock. SEE: Understanding The P/E Ratio

At $74.09, Chart Industries (Nasdaq:GTLS) has slipped 1.8%. The company's volume for the day so far is 92,644 shares. This is a sign that there will be less trading activity than there was yesterday. 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. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. 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. The capitalizion ratio of 27.7% 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. 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.

Caterpillar (NYSE:CAT) is down 1.7% to reach $92.30 per share. With 3.6 million shares changing hands so far today, the company's volume is consistent with its current three-month 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 provide investors with an estimation, albeit a simplistic one, of the value of a stock. Dividend yield measures the income that a stock will generate for an investor. CAT has a dividend yield of 2.2%. A higher dividend yield may indicate a risk of a fall in the price of the security, or a cut in the level of dividend payments, either of which would have the effect of dropping future returns. SEE: Guide To Stock-Picking Strategies: Income Investing

After a decline of 1.7%, United Technologies (NYSE:UTX) has hit a share price of $80.35. The company is currently trading a volume of 2.2 million shares. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. 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. One of the favorite tools of many value investors is analyzing price/book value ratios, as it provides a measure of the underlying value of a company's assets as compared to the valuation of its equity. UTX has a P/B ratio of 3.24 which shows that its share price is higher 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. To put things in perspective, should be made among companies in the same industry rather than across industries. SEE: Investment Valuation Ratios: Price/Book Value Ratio

The Bottom Line On any given day, a particular stock may see positive or negative change in its share price. 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.

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