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Tickers in this Article: EXP, THO, TXI, ESLT, VMC, NC, MLM
So far today, the Nasdaq is trading up 0.4%, the S&P 500 has increased 0.3% and the Dow remains relatively unchanged. 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) has remained steady so far today and here are its biggest movers:
CompanyMarket CapPercentage Change
Eagle Materials (NYSE:EXP)$1.97 billion+7.5%
Thor Industries (NYSE:THO)$1.82 billion+5.1%
Texas Industries (NYSE:TXI)$1.18 billion-4.1%
Elbit Systems Ltd (Nasdaq:ESLT)$1.42 billion+3.8%
Vulcan Materials (NYSE:VMC)$5.92 billion+2.7%
NACCO Industries (NYSE:NC)$959.3 million+1.9%
Martin Marietta Materials (NYSE:MLM)$3.82 billion+1.8%
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Rising 7.5%, Eagle Materials (NYSE:EXP) is currently trading at $46.53 per share. So far today, 667,895 shares of the company's stock have changed hands. This is greater than yesterday's volume of 662,378 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. Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. The price/earnings to growth (PEG) ratio compares a company's P/E ratio to its earnings-per-share growth rate, which tells you whether or not you are getting a good value when purchasing a stock with a high price/earnings ratio (P/E ratio). EXP's PEG ratio is 2.94. 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.

Thor Industries (NYSE:THO) has risen 5.1% and is currently trading at $36.15 per share. The company's volume is currently 961,351 shares for the day, 2.1 times the current daily average. 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. The price/book value ratio is especially important for value investors as it can provide an indication of the true value of a company's assets at a time when its business model may be failing. THO's P/B ratio of 2.35 shows that its share price is higher than its book value. This may be a sign that the company is overvalued. Users need to be careful when applying this ratio though, as it is more useful for industrial companies that have a lot of tangible assets than it is for technology or consumer product companies that may not have much in the way of hard assets. SEE: How Buybacks Warps The Price-To-Book Ratio

Texas Industries (NYSE:TXI) has fallen 4.1% and is currently trading at $40.31 per share. So far today, the company's volume is 567,005 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. 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. A price/sales ratio is derived by dividing stock market price by company sales. The P/S ratio for TXI is 1.38, which is relatively high. This could be a good sign if the share price increases. 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.

Elbit Systems Ltd (Nasdaq:ESLT) is currently trading at $34.27 per share, a 3.8% increase. So far today, the company's volume is 3,924 shares, 0.3 times its current three-month average. The trading volume for a stock indicates the level of investor 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/earnings ratio is calculated by taking a stock price and dividing it by the earnings-per-share (EPS). Relative to the industry P/E ratio of 16.27, ESLT's 15.0 is low. A low P/E ratio may indicate that the market expects relatively slower earnings growth. A high P/E ratio indicates a stock that is expensive, while a low P/E ratio indicates a stock that is cheap. SEE: How To Use The P/E Ratio And PEG To Tell The Future Of A Stock

Vulcan Materials (NYSE:VMC) has moved up 2.7% and is currently trading at $47 per share. The company's volume is currently 203,960 shares. At this rate, trading activity will likely be down from yesterday when 697,171 shares changed hands. 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. To a large degree, the debt-equity (D/E) ratio provides another vantage point on a company's leverage position, in this case, comparing total liabilities to shareholders' equity, as opposed to total assets in the debt ratio. The D/E ratio for VMC is 75%. The D/E ratio is not a pure measurement of a company's debt because it includes operational liabilities in total liabilities.

After rising 1.9%, NACCO Industries (NYSE:NC) is currently trading at a share price of $116.56. So far today, the company's volume is 4,528 shares, 0.1 times the average daily volume. A stock's volume conveys how excited investors are about it. Investment valuation ratios can be very useful in estimating whether a stock price is too high, reasonable or a bargain investment opportunity. 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. NC's capitalization ratio is 25.2%, which is relatively low. 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.

Martin Marietta Materials (NYSE:MLM) has risen 1.8% to hit a current price of $84.73 per share. The company's volume for the day so far is 252,092 shares. Volume is used to evaluate how meaningful the price movement of a stock is. Valuation ratios allow the investor to make a quick determination as to a company's investment value. The debt ratio shows the proportion of assets that a company is financing through debt. MLM has a debt ratio of 56.1%. 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.

The Bottom Line No matter the economic climate, Wall Street will always have stocks that make major moves each week. 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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