BorgWarner Inc. (BWA) Shares Slip, Investors Watching Closely, Here is Why

BorgWarner Inc. (NYSE: BWA) shares rose on Wednesday Jan 4 with lower trade volume than normal after a number of analysts weighed in on the investing value of the stock with a downgraded rating.

Meanwhile, U.S. stocks opened higher on Wednesday as banking stocks led the Dow Jones Industrial Average closer to the 20,000 milestone.

The Dow DJIA, +0.18% gained 25 points, or 0.1%, to 19,906. The S&P 500 SPX, +0.36% climbed four points, or 0.2%, to 2,262. The Nasdaq Composite Index COMP, +0.50% added 13 points, or 0.3%, to 5,447.

Shares of BorgWarner Inc. (NYSE: BWA) were downgraded by analysts at Evercore ISI in a note to their investors today. Evercore ISI currently has a rating of Hold on the shares. The one-year price target of $40.24 is above the opening price of $39.99, causing a fair amount of other analysts to comment on the stock recently. Looking back over the last year, BorgWarner Inc. stock has a high of $41.98. Downgrades are more likely when analysts consider that the future prospects for the security have weakened from the initial recommendation, usually caused by a material and integral change in the company’s procedures, future outlook or industry.

BorgWarner Inc. (NYSE: BWA) shares last traded at $40.28, an increase of $0.21 or 0.01 over the previous closing price. Opening at $39.99, they ranged from $39.17 and $40.43 throughout the day.

BorgWarner Inc. (NYSE: BWA) now has a market cap of 8.58B.

BorgWarner Inc. (NYSE: BWA) Average Daily Trading Volume

The stock’s average daily volume is 2,684,360 shares out of a total float 200,647,000 and some 202,699 shares crossed the trading desk yesterday, below the norm. lower than normal. Look for trading volume to pick up in the coming days as investors often use upticks in trading volume to identify heavy volume accumulation or distribution by institutional investors.

However, a single day of heavy buy side trading is not enough to assert a trend. As such, market traders will continue to watch for institutional sponsorship as a signal that financial institutions are moving forward.

Institutional sponsorship is defined by ownership of a stock by mutual funds, banks, pension funds and other large institutions.

Professional investors such as these have substantial teams of analysts researching thousands of stocks, so it is good corroboration to see them taking a postion in a stock you’re considering.

BorgWarner Inc. (NYSE: BWA) Moving Averages

A moving average can also act as support or resistance. In an uptrend a 50-day, 100-day or 200-day moving average may act as a support level, as shown in the figure below.

This is because the average acts like a floor (support), so the price bounces up off of it.

In a downtrend a moving average may act as resistance; like a ceiling, the price hits it and then starts to drop again.

By spotting trends, moving averages allow investors to make those trends work in their favor and increase the number of winning trades.

Trades for BorgWarner Inc. (NYSE: BWA) have ranged from $27.52 – 41.98, and the stock now has a 50-day MA of $38.25 and 200-day MA of $34.83. Today’s last price is 0.04% below the 52 week high of $41.98.

Indeed, earnings growth is among the most critical things to look at in regards to stock investing and, accordingly, investors seek companies that have raised their earnings at least 25% or more for a 3 year period.

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