Agco Corp. (AGCO) Stock Moves Down and Here’s Why

Agco Corp. (NYSE: AGCO) shares fell on Tuesday Dec 13 with 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 DJIA, +0.47% climbed 106 points, or 0.6%, to 19,905. If the Dow finishes higher, it will notch its seventh straight gain.

The S&P 500 index SPX, +0.56% gained 10.45 points, or 0.5%, to 2,267 and the tech-heavy Nasdaq Composite Index COMP, +1.02% added 48 points, or 0.9%, to 5,461.

Both the S&P 500 index SPX, +0.56% and Nasdaq Composite COMP, +1.02% ended lower on Monday, with investors appearing reluctant to push shares higher ahead of the Fed meeting

Shares of Agco Corp. (NYSE: AGCO) were downgraded by analysts at Jefferies Group in a note to their investors today. With a rating of Hold on the shares, Agco Corp. has a 52-week high of $61.22. The one-year price target of $51.31 is a decrease compared to the opening price of $59.05, that has caused a fair amount of other analysts to issue statements on the company recently. Downgrades occur when analysts feel that the future prospects for the security have diminished from the original recommendation, often due to a material and integral change in the company’s procedures, future outlook or industry.

Agco Corp. (NYSE: AGCO) shares last traded at $59.70, which represents a dip of $0.57 per share or -0.95% from the previous closing price. Opening at $59.05, they ranged from $59.05 and $59.96 throughout the day.

Agco Corp. (NYSE: AGCO) now has a market cap of 4.79B.

Agco Corp. (NYSE: AGCO) Average Daily Trading Volume

161,123 shares traded hands yesterday, below normal, out of a total float 60,353,000. Look for trading volume to pick up in the coming days as momentum traders often use swings in trading volume to determine substantial volume accumulation or distribution by institutional investors.

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

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 teams of analysts that investigate thousands of stocks, so it is good corroboration to see them buying a stock you are considering.

Agco Corp. (NYSE: AGCO) 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 successful trades.

With that in mind, Agco Corp. (NYSE: AGCO) now has a 50-day MA of $53.88 and 200-day MA of $50.43. It has traded in a 52-week range between $42.40 – 61.22 and today’s last price is 2.48%% lower than the 52 week high of $61.22.

Earnings growth is a crucial factor to research when buying stocks and investors watch for companies that have grown their earnings at least 25% or more over 3 consecutive years.

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