American Renal Associates Holdings Inc. (ARA) Shares Slip, Investors Watching Closely, Here is Why

American Renal Associates Holdings Inc. (NYSE: ARA) shares fell on Monday Nov 21 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, stocks were set to open up this morning. The Dow Jones Industrial Average futures YMZ6, +0.20% was 10 points, or less than 0.1%, higher at 18,863, while S&P 500 index futures ESZ6, +0.44% rose 3.95 points, or 0.2%, at 2,184.75. Nasdaq-100 NQZ6, +0.74% added 12.25 points, or 0.2%, to 4,820.75.

Shares of American Renal Associates Holdings Inc. (NYSE: ARA) were downgraded by analysts at Goldman Sachs Group Inc. in a note to their investors today. Goldman Sachs Group Inc. currently has a rating of Sell on the stock. The one-year price target of $24.20 is higher than the opening price of $23.02, resulting a number of other analysts to issue statements on the company in recent days. Looking back over the last 52 weeks, American Renal Associates Holdings Inc. stock has a high of $29.65. Important and major changes in the company’s procedures, future vision or industry can cause downgrades as the analysts feel that the future prospects for the security have weakened from the initial recommendation.

American Renal Associates Holdings Inc. (NYSE: ARA) shares last traded at $22.75, which represents a drop of $1.35 per share or -5.60% from the previous closing price. Opening at $23.02, they ranged from $22.02 and $23.02 throughout the day.

American Renal Associates Holdings Inc. (NYSE: ARA) now has a market cap of 702.25M.

American Renal Associates Holdings Inc. (NYSE: ARA) Average Daily Trading Volume

51,038 shares crossed the trading desk yesterday, below normal, out of a total float 12,286,000. Look for trading volume to pick up in the coming days as investors often use swings in trading volume to determine heavy volume aggregation or distribution by institutional investors.

However, one 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 cue that financial institutions are moving forward.

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

Professional investors such as these have teams of analysts that investigate thousands of stocks, so it is good validation to see them taking a postion in a stock you are researching.

American Renal Associates Holdings Inc. (NYSE: ARA) 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 following the activity of these professional investors and how they influence moving averages, traders are able to make make educated trades.

Trades for American Renal Associates Holdings Inc. (NYSE: ARA) have ranged from $16.86 – 29.65, and the stock now has a 50-day MA of $18.70 and 200-day MA of $23.19. Today’s last price is 23.27%% lower than the 52 week high of $29.65.

Earnings growth is a critical factor to consider when buying stocks and investors seek companies that have grown their earnings at least 25% or more over a 3 year period.

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