Arctic Cat Inc. (NASDAQ: ACAT) shares fell in early trading yesterday 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 edged lower Monday, with major indexes retreating from record levels.
The Dow Jones Industrial Average DJIA, -0.31% fell 48 points, or 0.2%, to 19,916, while the S&P 500 index SPX, -0.29% lost 5 points to 2,272, a drop of 0.2%. The Nasdaq Composite Index COMP, -0.03% rose 4 points to 5,529, a gain of about 0.1%.
Analysts at Robert W. Baird downgraded shares of Arctic Cat Inc. (NASDAQ: ACAT) from Outperform to Neutral in a research note to investors today. With a rating of Neutral on the shares, the company has a 52-week high of $19.82. The one-year price target of $14.29 is a decrease compared to the opening price of $15.48, that has caused a fair amount of other analysts to report on the company in recent days. Downgrades are more common when analysts believe that the future prospects for the security have diminished from the original recommendation, often caused by a considerable and major digression in the company’s actions, future outlook or industry.
Shares of Arctic Cat Inc. (NASDAQ: ACAT) opened at $15.48 yesterday and traded in a range between, $15.23 and $15.54, and last traded at $15.23, which represents a drop of $0.75 compared to the previous closing price.
Arctic Cat Inc. (NASDAQ: ACAT) now has a market cap of 198.71M.
Arctic Cat Inc. (NASDAQ: ACAT) Average Daily Trading Volume
The stock’s average daily volume is 132,119 shares out of a total float 12,889,000 and some 21,130 shares crossed the trading desk yesterday, 97 percent below the average. lower than normal. Look for trading volume to pick up in the coming days as investors often use swings in trading volume to identify heavy volume accumulation or distribution by institutional investors.
While increased trading for one day will not mean much, however, a trend of heavy trading volume on the buy side over a period of days or weeks sends a positive signal to market traders that institutions may be moving in, so institutional sponsorship is very important.
Institutional sponsorship just refers to ownership of a stock by mutual funds, banks, pension funds and other large institutions.
Professional investors such as these retain substantial teams of analysts that investigate thousands of stocks. So watching their interests is a good way to make sure you are buying the right stocks.
Arctic Cat Inc. (NASDAQ: ACAT) 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 traders to make those trends work in their favor and increase the number of successful trades.
With that in mind, Arctic Cat Inc. (NASDAQ: ACAT) now has a 50-day MA of $15.89 and 200-day MA of $15.55. It has traded in a 52-week range between $8.90 – 19.82 and today’s last price is 23.16%% lower than the 52 week high of $19.82.
Indeed, earnings growth is among the most critical things to look at in regards to stock investing and, accordingly, investors look for companies that have grown their earnings at least 25% or more for the past 3 years.
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