Capstead Mortgage Corporation (NYSE: CMO) shares fell on Tuesday February 7 on lower trade volume than normal after a number of analysts weighed in on the investing value of the stock with a downgraded rating.
U.S. stocks were up in early trade on Tuesday which could put the equity market on track to set new records.
Investors were focusing on earnings, with GM and Michael Kors making moves after reporting early.
S&P 500 futures ESH7, +0.31% rose 7 points, or 0.3%, to 2,293.50, while Dow Jones Industrial Average futures YMH7, +0.46% tacked on 70 points, or 0.4%, to 20,042. Nasdaq-100 futures NQH7, +0.48% added 14 points, or 0.3%, to 5,171.75.
Shares of Capstead Mortgage Corporation (NYSE: CMO) were downgraded by analysts at Wells Fargo & Company in a note to their investors today. With a rating of Market Perform on the shares, the company has a 52-week high of $10.96. As a means of comparison, a number of other analysts have issued reports on the company recently, and the company has secured a consensus one-year price target of $9.50, a decrease compared to the opening price of $10.42. Downgrades occur when analysts feel that the future prospects for the security have diminished from the original recommendation, usually caused by an important and crucial change in the company’s operations, future outlook or industry.
Shares of Capstead Mortgage Corporation (NYSE: CMO) opened at $10.42 yesterday trading between $10.38 and $10.54, and last traded at $10.53, a drop of $0.17 from the previous closing price.
Capstead Mortgage Corporation (NYSE: CMO) now has a market cap of 1.01B.
Capstead Mortgage Corporation (NYSE: CMO) Average Daily Trading Volume
193,262 shares traded hands yesterday, 29 percent below normal, out of a total float 94,341,000. 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, conversely, 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 simply refers to ownership of a stock by mutual funds, banks, pension funds and other large institutions.
These professional investors retain teams of analysts researching thousands of stocks. Thus, watching their interests is a good way to make sure you are buying the right stocks.
Capstead Mortgage Corporation (NYSE: CMO) 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 Capstead Mortgage Corporation (NYSE: CMO) have ranged from $8.93 – 10.960, and the stock now has a 50-day MA of $10.59 and 200-day MA of $10.03. Today’s last price is 3.91%% lower than the 52 week high of $10.96.
Earnings growth is an important factor to consider when buying stocks and investors look for companies that have been successful at growing their earnings at least 25% or more over the past 3 years.
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