LGI Homes Inc. (LGIH) Shares Active after Upgrade at Zacks Investment Research

LGI Homes Inc. (NASDAQ: LGIH) shares fell back in value Wednesday Nov 30 with lower trade volume than normal after a number of analysts weighed in on the investing value of the stock with a upgraded rating.

Meanwhile, the Dow Jones Industrial Average hit an intraday record after opening higher Wednesday, led by the energy sector as hopes rose that the world’s major oil producers are near a deal on limiting output.

The benchmark S&P 500 and Dow were on track to post their largest monthly gains since March.

The S&P 500 SPX, +0.22% gained 5 points, or 0.2%, to 2,209. The Dow Jones Industrial Average DJIA, +0.41% added 62 points, or 0.3%, to 19,184, trading in record territory. The Nasdaq Composite COMP, -0.08% was 7 points, or 0.1%, higher at 5,386.

Analysts at Zacks Investment Research upgraded shares of LGI Homes Inc. (NASDAQ: LGIH) from Sell to Hold today. With a rating of Hold on the stock, LGI Homes Inc. has a 52-week high of $40.47. A number of other analysts have issued reports on the stock in recent days, and LGI Homes Inc. has earned a consensus one-year price target of $42.25, higher than the opening price of $33.55. Share prices often trend to the upside on recommendations and new price targets of professional analysts.

LGI Homes Inc. (NASDAQ: LGIH) shares last traded at $33.39, a decrease of $0.16 per share or -0.48% from the previous closing price. Opening at $33.55, they fluctuated from $32.80 and $33.86 throughout the day.

LGI Homes Inc. (NASDAQ: LGIH) currently has a market cap of 710.61M.

LGI Homes Inc. (NASDAQ: LGIH) Average Daily Trading Volume

The stock’s average daily volume is 421,908 shares out of a total float 17,124,000 and some 24,220 shares crossed the trading desk yesterday, lower than the norm. Trading volume is likely to increase in the next few days as swing traders often use increases in trading volume to identify substantial volume accumulation or dissemination by institutional investors.

As with all potential breakouts, investors look for volume to be at least 40%-50% above normal on the breakout to demonstrate that fund managers and other professional investors are jumping in.

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

These instituitional investors retain teams of analysts researching thousands of stocks, so it is good corroboration to see them taking a postion in a stock you’re considering.

LGI Homes Inc. (NASDAQ: LGIH) 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 more impactful judgments on trades when they track the trading habits of professional investors.

With that in mind, LGI Homes Inc. (NASDAQ: LGIH) now has a 50-day MA of $31.57 and 200-day MA of $32.53. It has traded in a 52-week range between $18.74 – 40.47 and today’s last price is 17.49%% lower than the 52 week high of $40.47.

Earnings growth is a critical factor to look at when investing in stocks and investors identify companies that have been successful at growing their earnings by at least 25% for the past 3 years.

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