BorgWarner Inc. (NYSE: BWA) shares fell on Monday Dec 19 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 DJIA, +0.22% was trading up 37 points, or 0.2%, at 19,879, inching up to break the psychologically important 20,000 level.
The S&P 500 index SPX, +0.20% was up 6 points, or 0.3% at 2,264, with nine of the 11 main sectors trading higher.
The Nasdaq Composite Index COMP, +0.32% added 18 points, or 0.3% to 5,455.
Analysts at Wells Fargo & Co. downgraded shares of BorgWarner Inc. (NYSE: BWA) from Outperform to Market Perform in a research note to investors today. With a rating of Market Perform on the shares, BorgWarner Inc. has a 52-week high of $44.35. The one-year price target of $39.06 is above the opening price of $38.91, causing a number of other analysts to comment on the company recently. Downgrades happen when analysts believe that the future prospects for the security have weakened from the original recommendation, often because of an important and fundamental digression in the company’s procedures, future vision or industry.
Shares of BorgWarner Inc. (NYSE: BWA) opened at $38.91 on Tuesday trading between $38.90 and $39.61, and last traded at $39.28, which is a decrease of $0.46 per share or -1.16% from the previous closing price.
BorgWarner Inc. (NYSE: BWA) now has a market cap of 8.37B.
BorgWarner Inc. (NYSE: BWA) Average Daily Trading Volume
240,874 shares crossed the trading desk yesterday, lower than the norm, out of a total float 200,647,000. Trading volume is likely to increase in the next few days as swing traders often use swings in trading volume to determine substantial volume growth or distribution by institutional investors.
However, just a day of heavy buy side trading is not enough to affirm a trend. As such, market traders will continue to watch for institutional sponsorship as an indicator 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 retain substantial teams of analysts that investigate thousands of stocks, so it is good validation to see them taking a postion in a stock you are considering.
BorgWarner Inc. (NYSE: BWA) 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, BorgWarner Inc. (NYSE: BWA) now has a 50-day MA of $36.62 and 200-day MA of $34.36. It has traded in a 52-week range between $27.52 – 44.35 and today’s last price is 11.43%% lower than the 52 week high of $44.35.
Earnings growth is an important factor to consider when buying stocks and investors watch for companies that have been successful at growing their earnings by at least 25% over 3 consecutive years.
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