Silicon Laboratories Inc. (SLAB) shares fall following downgrade at Zacks Investment Research

Zacks Investment Research (Silicon Laboratories Inc.: NASDAQ) shares fell on Wednesday Dec 28 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, U.S. stocks were little changed on Wednesday, as investors found few reasons to keep pushing shares higher towards the 20,000 mark.

The Dow Jones Industrial Average DJIA, -0.11% rose 3.1 points to 19,949, essentially unchanged on the day. The S&P 500 SPX, -0.39% lost 3 points, or 0.1%, to 2,266 while the Nasdaq Composite Index COMP, -0.59% slipped 6.4 points, or 0.1%, to 5,482.

Shares of Zacks Investment Research (Silicon Laboratories Inc.: NASDAQ) were downgraded by analysts at Zacks Investment Research in a note to their investors today. The company currently has a rating of Hold on the shares. As a means of comparison, a number of other analysts have commented on the stock recently, and Silicon Laboratories Inc. has earned a consensus one-year price target of $65.55, less than the opening price of $66.90, a difference of 9.89 percent. Silicon Laboratories Inc. stock has a 52-week high of $68.95. Downgrades happen when analysts consider that the future prospects for the security have dropped from the original recommendation, usually because of a considerable and fundamental change in the company’s operations, future direction or industry.

Shares of Zacks Investment Research (Silicon Laboratories Inc.: NASDAQ) opened at $66.90 on Tuesday and has traded in a range between, $66.20 and $66.90, and last traded at $66.30, which is a dip of $0.60 per share or -0.90% from the previous closing price.

Zacks Investment Research (Silicon Laboratories Inc.: NASDAQ) now has a market cap of 2.77B.

Zacks Investment Research (Silicon Laboratories Inc.: NASDAQ) Average Daily Trading Volume

The stock’s average daily volume is 251,638 shares out of a total float 40,857,000 and some 5,341 shares crossed the trading desk yesterday, below normal. Look for trading volume to pick up in the coming days as swing traders often use increases in trading volume to determine heavy volume aggregation or distribution by institutional investors.

As with all possible breakouts, investors watch 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.

These professional investors retain substantial teams of analysts that investigate thousands of stocks, so it is good corroboration to see them buying a stock you’re considering.

Zacks Investment Research (Silicon Laboratories Inc.: NASDAQ) 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 influence—it allows for traders to make more useful decisions on trades.

Trades for Zacks Investment Research (Silicon Laboratories Inc.: NASDAQ) have ranged from $36.56 – 68.95, and the stock now has a 50-day MA of $65.63 and 200-day MA of $57.29. Today’s last price is 3.84%% below the 52 week high of $68.95.

Indeed, earnings growth is among the most crucial things to look at in regards to stock investing and, accordingly, investors identify companies that have raised their earnings at least 25% or more over 3 consecutive years.

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