Kansas City Southern (NYSE: KSU) shares fell on Monday January 23 on 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 flipped between small gains and losses in early trade on Monday.
The Dow Jones Industrial Average DJIA, -0.14% was off by 13 points, or less than 0.1%, at 19,815, with McDonald’s Corp MCD, -0.99% and General Electric CoGE, -0.95% leading the losses, down more than 1%.
The S&P 500 SPX, -0.18% slipped 2 point to 2,270, with five of the main sectors trading lower. The Nasdaq Composite COMP, -0.09% gained 4 points to 5,558.
Shares of Kansas City Southern (NYSE: KSU) were downgraded by analysts at Seaport Global Securities in a note to their investors today. With a rating of Neutral on the shares, Kansas City Southern has a 52-week high of $100.69. As a means of comparison, a number of other analysts have issued reports on the stock recently, and Kansas City Southern has secured a consensus one-year price target of $96.05, above the opening price of $86.95, a difference of 11.22 percent. Downgrades are more common when analysts consider that the future prospects for the security have diminished from the original recommendation, often because of a material and fundamental digression in the company’s actions, future direction or industry.
Yesterday Kansas City Southern (NYSE: KSU) shares last traded at $85.64, a drop of $2.27 over the previous closing price. Opening at $86.95, they ranged from $85.10 and $86.95 throughout the day.
Kansas City Southern (NYSE: KSU) currently has a market cap of 9.21B.
Kansas City Southern (NYSE: KSU) Average Daily Trading Volume
The stock’s average daily volume is 2,008,890 shares out of a total float 106,865,000 and some 418,951 shares crossed the trading desk yesterday, 13 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.
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 professional investors have substantial teams of analysts that research thousands of stocks, so it is good corroboration to see them taking a postion in a stock you’re considering.
Kansas City Southern (NYSE: KSU) 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 tracking the activity of these professional investors—and the moving averages they affect—it allows for traders to make more effective decisions on trades.
With that in mind, Kansas City Southern (NYSE: KSU) now has a 50-day MA of $84.53 and 200-day MA of $90.67. It has traded in a 52-week range between $64.62 – 100.69 and today’s last price is 14.95%% lower than the 52 week high of $100.69.
Indeed, earnings growth is among the most crucial things to look at in regards to stock investing and, accordingly, investors look for companies that have raised their earnings at least 25% or more over the past 3 years.
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