NIC Inc. (NASDAQ: EGOV) shares fell on Thursday February 2 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, The Dow Jones Industrial Average DJIA, -0.10% fell 34 points, or 0.2%, to 19,858. The S&P 500 SPX, -0.11% lost 4 points to 2,276, a drop of 0.2%. The Nasdaq Composite Index COMP, -0.05% slid 16 points, or 0.3%, to 5,626. Among the most actively traded Nasdaq stocks was Facebook Inc FB, +0.31% which fell 0.7% a day after it reported its quarterly results.
Analysts at Avondale Partners downgraded shares of NIC Inc. (NASDAQ: EGOV) from Market Perform to Underperform in a research note to investors today. Avondale Partners currently has a rating of Underperform on the shares. The one-year price target of $23.50 is above the opening price of $20.70, resulting a fair amount of other analysts to issue statements on the company in recent days. Looking back over the last year, NIC Inc. stock has a high of $25.90. Downgrades happen when analysts feel that the future prospects for the security have dropped from the original recommendation, usually caused by an important and integral change in the company’s actions, future vision or industry.
Shares of NIC Inc. (NASDAQ: EGOV) opened at $20.70 yesterday trading between $20.50 and $22.45, and last traded at $22.35, a drop of $1.65 compared to the previous closing price.
NIC Inc. (NASDAQ: EGOV) currently has a market cap of 1.47B.
NIC Inc. (NASDAQ: EGOV) Average Daily Trading Volume
190,699 shares traded hands yesterday, 49 percent lower than the average, out of a total float 62,563,000. 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.
While increased trading for short periods will not mean much 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 is defined by ownership of a stock by mutual funds, banks, pension funds and other large institutions.
These professional investors have teams of analysts that research thousands of stocks. So watching their interests is a good way to ensure you are buying the right stocks.
NIC Inc. (NASDAQ: EGOV) 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.
Trades for NIC Inc. (NASDAQ: EGOV) have ranged from $14.48 – 25.90, and the stock now has a 50-day MA of $24.75 and 200-day MA of $23.74. Today’s last price is 13.71%% below the 52 week high of $25.90.
Earnings growth is an important factor to consider when investing in stocks and investors seek companies that have increased their earnings by at least 25% for 3 consecutive years.
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