Versartis, Inc. (VSAR) Stock Moves Down and Here’s Why

Versartis, Inc. (NASDAQ: VSAR) 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 opened significantly lower in early trading. The Dow Jones Industrial Average was 58 points lower, or 0.29% to 19895, the S&P 500 fell 7 points, or 0.28% to 2268, while the Nasdaq dropped 22 points, or 0.38% to 5542.

Analysts at Zacks Investment Research downgraded shares of Versartis, Inc. (NASDAQ: VSAR) from Buy to Hold in a research note to investors today. With a rating of Hold on the stock, the company has a 52-week high of $16.30. The one-year price target of $25.71 is above the opening price of $15.15, causing a fair amount of other analysts to report on the stock recently. Downgrades occur when analysts consider that the future prospects for the security have diminished from the original recommendation, usually due to a considerable and crucial digression in the company’s actions, future direction or industry.

Yesterday Versartis, Inc. (NASDAQ: VSAR) shares last traded at $15.35, which represents a drop of $0.15 over the previous closing price. Opening at $15.15, they fluctuated from $15.15 and $15.35 throughout the day.

Versartis, Inc. (NASDAQ: VSAR) currently has a market cap of 534.10M.

Versartis, Inc. (NASDAQ: VSAR) Average Daily Trading Volume

The stock’s average daily volume is 144,897 shares out of a total float 16,853,000 and some 2,732 shares traded hands yesterday, 26 percent lower than the norm. lower than normal. Look for trading volume to pick up in the coming days as swing traders often use increases in trading volume to identify heavy volume accumulation or distribution by institutional investors.

As with all potential breakouts, investors look for volume to be at least 40%-50% higher than normal on the breakout to show that fund managers and other professional investors are jumping in.

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

These professional investors have substantial teams of analysts that investigate thousands of stocks. Thus, watching their interests is a good way to make sure you are buying the right stocks.

Versartis, Inc. (NASDAQ: VSAR) 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 successful trades.

Trades for Versartis, Inc. (NASDAQ: VSAR) have ranged from $6.17 – 16.30, and the stock now has a 50-day MA of $13.96 and 200-day MA of $12.34. Today’s last price is 5.83%% below the 52 week high of $16.30.

Earnings growth is a critical factor to consider when investing in stocks and investors seek companies that have grown their earnings by at least 25% for a 3 year period.

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