Currently, the Nasdaq has increased 0.4%, the S&P 500 has climbed 0.1% and the Dow is down 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 trading up 0.3% overall, and these are the biggest movers in the sector so far:
|Company||Market Cap||Percentage Change|
|Gol Linhas Aereas Inteligentes SA (NYSE:GOL)||$1.7 billion||-9.3%|
|Ship Finance (NYSE:SFL)||$1.27 billion||-5.7%|
|Old Dominion Freight (Nasdaq:ODFL)||$2.6 billion||-3.9%|
|Copa Holdings (NYSE:CPA)||$3.68 billion||+1.8%|
|Seacor Holdings (NYSE:CKH)||$1.81 billion||+1.7%|
|Alexander & Baldwin (NYSE:ALEX)||$1.22 billion||+1.7%|
|Westinghouse Air Brake (NYSE:WAB)||$3.78 billion||+1.7%|
Broker Summary: OptionsXpress Online Trading Platform
Gol Linhas Aereas Inteligentes SA (NYSE:GOL) is trading at $5.71 per share, down 9.3%. The company's volume is currently 942,661 shares. At this rate, trading activity will likely be down from yesterday when 2.9 million shares changed hands. 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. Looking at a company's valuation ratios is a good way of getting a basic idea as to its value as an investment. The price/book value ratio, often expressed simply as "price-to-book", provides investors a way to compare the market value, or what they are paying for each share, to a conservative measure of the value of the firm. GOL has a P/B ratio of 2.09 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. P/B has its shortcomings but is still widely used as a valuation metric, more relevant for use by investors looking at capital-intensive or finance-related businesses, such as banks; book value does not carry much meaning for service-based firms with few tangible assets. SEE: Using The Price-To-Book Ratio To Evaluate Companies
Ship Finance (NYSE:SFL) has fallen 5.7% and is currently trading at $15.09 per share. The company's volume for the day so far is 2.3 million shares, 3.6 times its average over the past three months. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. In a nutshell, the price/sales ratio shows how much Wall Street values every dollar of the company's sales. SFL's P/S ratio of 3.72 is on the high side. 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.
Old Dominion Freight (Nasdaq:ODFL) has decreased to $28.96 per share, a 3.9% fall. The company is currently trading a volume of 386,940 shares. If a stock price makes a big move up or down, volume lets us know the significance of that move. It is important for an investor to estimate the value of any potential or existing investment; valuation ratios make this easier. The easy-to-calculate debt ratio is helpful to investors looking for a quick take on the leverage for a company. ODFL has a low debt ratio of 42.9%. 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.
After an increase of 1.8%, Copa Holdings (NYSE:CPA) has reached a current price of $84.71. So far today, the company's volume is 104,483 shares, in keeping with its current daily average. Volume indicates the level of interest that investors have in a company at its current price. 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. 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. CPA's D/E ratio is 82%. The D/E ratio percentage provides a much more dramatic perspective on a company's leverage position than the debt ratio percentage.
Increasing 1.7%, Seacor Holdings (NYSE:CKH) is trading at $88.09 per share. The company is trading at a volume of 26,072 shares. This is a sign that there will be less trading activity than there was yesterday. In technical analysis, trading volume is used to determine the strength of a market indicator. 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. CKH has a capitalization ratio of 33.8%. Prudent use of leverage (debt) increases the financial resources available to a company for growth and expansion.
Alexander & Baldwin (NYSE:ALEX) has increased to a share price of $29.19, a 1.7% rise. With 29,039 shares changing hands so far today, the company's volume is 0.1 times the average volume over the last three months. When a stock price moves up or down, watching the volume is a good way of identifying how significant that 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 price/book value ratio is calculated by dividing the current stock price by the company's book value per share. ALEX's stock is trading for more than its book value with a P/B ratio of 1.4. 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
Westinghouse Air Brake (NYSE:WAB) has moved up 1.7% and is currently trading at $80.34 per share. This morning, the company is trading a volume of 66,765 shares. 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/sales ratio is used for spotting recovery situations or for double-checking that a company's growth has not become overvalued. The P/S ratio for WAB is 1.69, which is relatively high. In young companies, a high P/S ratio is a sign of sales growth that is expected to turn into earnings and cash flow. It is important to compare P/S ratios for companies in the same industry, as ratios can vary quite widely for companies in different industries.
The Bottom Line On any given day, a particular stock may see positive or negative change in its share price. Paying close attention to the previous ratios will help you identify key times to adjust your strategy. However, these fundamental metrics must be analyzed with historic data, industry information in addition to firm specific financial statements.