Kate Spade & Co. (NYSE: KATE) shares fell on Tuesday Nov 22 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 Jones Industrial Average opened opened higher, trading above 19,000 for the first time ever, while the S&P 500 traded above 2,200 shortly after the opening bell on Tuesday.
The S&P 500 SPX, +0.17% opened 5 points, or 0.2%, higher at 2,202. The Dow Jones Industrial Average DJIA, +0.20% added 45 points, or 0.2%, to 19,002. The Nasdaq Composite COMP, +0.25% began the session up 16 points, or 0.3%, at 5,385.
Shares of Kate Spade & Co. (NYSE: KATE) were downgraded by analysts at Cowen and Company in a note to their investors today. The company currently has a rating of Market Perform on the shares. As a means of comparison, a number of other analysts have commented on the stock recently, and the company has earned a consensus one-year price target of $19.25, higher than the opening price of $16.05, a difference of 11.90 percent. Kate Spade & Co. stock has a 52-week high of $26.46. Material and integral changes in the company’s procedures, future outlook or industry can cause downgrades as the analysts feel that the future prospects for the security have dropped from the initial recommendation.
Kate Spade & Co. (NYSE: KATE) shares last traded at $16.17, a decrease of $0.12 per share or -0.74% from the previous closing price. Opening at $16.05, they ranged from $15.94 and $16.20 throughout the day.
Kate Spade & Co. (NYSE: KATE) now has a market cap of 2.07B.
Kate Spade & Co. (NYSE: KATE) Average Daily Trading Volume
The stock’s average daily volume is 2,541,190 shares out of a total float 118,522,000 and some 351,286 shares crossed the trading desk yesterday, lower than normal. Investors often use upticks in trading volume to pinpoint substantial volume growth or distribution by institutional investors, so trading volume is likely to increase in the next few days.
As with all possible breakouts, investors look for volume to be at least 40%-50% above normal on the breakout to indicate that fund managers and other professional investors are jumping in.
Institutional sponsorship is defined by ownership of a stock by mutual funds, banks, pension funds and other large institutions.
Institutional investors such as these retain substantial teams of analysts that investigate thousands of stocks. So watching their interests is a good way to make sure you are buying the right stocks.
Kate Spade & Co. (NYSE: KATE) 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 marking the activity of these professional investors and how they affect moving averages, traders can make smarter trades.
With that in mind, Kate Spade & Co. (NYSE: KATE) now has a 50-day MA of $16.96 and 200-day MA of $19.35. It has traded in a 52-week range between $14.26 – 26.46 and today’s last price is 38.89%% lower than the 52 week high of $26.46.
Indeed, earnings growth is among the most crucial things to look at in regards to stock investing and, accordingly, investors seek companies that have raised their earnings at least 25% or more for a 3 year period.
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