Sonic Corp. (NASDAQ: SONC) 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, in early trading today the Dow Jones Industrial Average DJIA, +0.19% rose 40 points, or 0.2%, to 19,929 while the S&P 500 SPX, +0.31% added 5 points to 2,275, a rise of 0.2%. The Nasdaq Composite Index COMP, +0.53% climbed 19 points, or 0.3%, to 5,567.
Shares of Sonic Corp. (NASDAQ: SONC) were downgraded by analysts at Zacks Investment Research in a note to their investors today. Zacks Investment Research currently has a rating of Hold on the stock. As a means of comparison, a number of other analysts have spoken on the company in recent days, and Sonic Corp. has secured a consensus one-year price target of $28.21, higher than the opening price of $26.63, a difference of 10.64 percent. Sonic Corp. stock has a 52-week high of $36.34. Material and integral changes in the company’s operations, future direction or industry can cause downgrades as the analysts believe that the future prospects for the security have dropped from the initial recommendation.
Yesterday Sonic Corp. (NASDAQ: SONC) shares last traded at $26.52, which represents a decrease of $0.06 over the previous closing price. Opening at $26.63, they fluctuated from $26.52 and $26.86 throughout the day.
Sonic Corp. (NASDAQ: SONC) now has a market cap of 1.17B.
Sonic Corp. (NASDAQ: SONC) Average Daily Trading Volume
The stock’s average daily volume is 1,057,070 shares out of a total float 38,563,000 and some 47,774 shares crossed the trading desk yesterday, 50 percent lower than normal. 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 just refers to ownership of a stock by mutual funds, banks, pension funds and other large institutions.
These instituitional investors retain substantial teams of analysts researching thousands of stocks. Thus, watching their interests is a good way to make sure you are buying the right stocks.
Sonic Corp. (NASDAQ: SONC) 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 identifying trends, moving averages allow traders to make those trends work in their favor and increase the number of winning trades.
Trades for Sonic Corp. (NASDAQ: SONC) have ranged from $21.12 – 36.34, and the stock now has a 50-day MA of $27.15 and 200-day MA of $26.87. Today’s last price is 27.02%% under the 52 week high of $36.34.
Indeed, earnings growth is among the most critical things to look at in regards to stock investing and, accordingly, investors seek companies that have increased their earnings at least 25% or more over a 3 year period.
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