Eagle Materials Inc. (EXP) Stock Moves Down and Here’s Why

Eagle Materials Inc. (NYSE: EXP) shares rose on Monday Dec 5 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 Industrials on Monday opened at an all-time high as investors dismissed concerns about the outcome of Italy’s referendum on Sunday.

The Dow Jones Industrial Average rose DJIA, +0.41% 85 points, or 0.5%, at 19,260, the S&P 500 index SPX, +0.42% began trade 9 points, or 0.4%, higher at 2,201, while the Nasdaq Composite Index COMP, +0.43% advanced 27 points, or 0.5%, at 5,282.

Analysts at Citigroup Inc. downgraded shares of Eagle Materials Inc. (NYSE: EXP) from Buy to Neutral in a research note to investors today. With a rating of Neutral on the stock, the company has a 52-week high of $100.99. The one-year price target of $92.10 is less than the opening price of $99.60, that has caused a fair amount of other analysts to comment on the company in recent days. Considerable and major digressions in the company’s procedures, future vision or industry can cause downgrades as the analysts believe that the future prospects for the security have diminished from the initial recommendation.

Eagle Materials Inc. (NYSE: EXP) shares last traded at $99.73, a jump of $0.19 or 0.19% from the previous closing price. Opening at $99.60, they ranged from $98.71 and $99.73 throughout the day.

Eagle Materials Inc. (NYSE: EXP) now has a market cap of 4.81B.

Eagle Materials Inc. (NYSE: EXP) Average Daily Trading Volume

The stock’s average daily volume is 798,857 shares out of a total float 47,423,000 and some 102,272 shares crossed the trading desk yesterday, below the norm. Trading volume is likely to increase in the next few days as investors often use increases in trading volume to determine heavy volume accumulation or distribution by institutional investors.

However, just a day of significant buy side trading is not enough to determine a trend. As such, market traders will continue to watch for institutional sponsorship as a cue that financial institutions are moving forward.

Institutional sponsorship simply refers to ownership of a stock by mutual funds, banks, pension funds and other large institutions.

These instituitional investors have teams of analysts researching thousands of stocks. So watching their interests is a good way to ensure you are buying the right stocks.

Eagle Materials Inc. (NYSE: EXP) 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.

Traders are able to make make educated trades when they follow the trading habits of professional investors.

With that in mind, Eagle Materials Inc. (NYSE: EXP) now has a 50-day MA of $87.43 and 200-day MA of $81.32. It has traded in a 52-week range between $45.03 – 100.99 and today’s last price is 1.25%% lower than the 52 week high of $100.99.

Indeed, earnings growth is among the most critical things to look at in regards to stock investing and, accordingly, investors seek companies that have increased their earnings at least 25% or more for a 3 year period.

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