Pandora Media Inc. (P) Stock Moves Down and Here’s Why

Pandora Media Inc. (NYSE: P) 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 Vetr Inc. downgraded shares of Pandora Media Inc. (NYSE: P) from Hold to Strong Sell in a research note to investors today. With a rating of Strong Sell on the shares, Pandora Media Inc. has a 52-week high of $16.23. A number of other analysts have issued reports on the company recently, and the company has secured a consensus one-year price target of $14.16, above the opening price of $13.08. Material and integral digressions in the company’s procedures, future direction or industry can cause downgrades as the analysts feel that the future prospects for the security have weakened from the initial recommendation.

Pandora Media Inc. (NYSE: P) shares last traded at $13.43, which is a jump of $0.10 or 0.75% over the previous closing price. Opening at $13.08, they fluctuated from $13.00 and $13.55 throughout the day.

Pandora Media Inc. (NYSE: P) now has a market cap of 3.13B.

Pandora Media Inc. (NYSE: P) Average Daily Trading Volume

The stock’s average daily volume is 7,038,730 shares out of a total float 206,268,000 and some 2,282,093 shares crossed the trading desk yesterday, lower than the average. Look for trading volume to pick up in the coming days as investors often use increases in trading volume to determine heavy volume accumulation or circulation by institutional investors.

While increased trading for one day will not mean much, conversely, a trend of heavy trading volume on the buy side over a series of days or weeks delivers a positive indicator to market traders that institutions may be moving in, so institutional sponsorship is crucial.

Institutional sponsorship is defined by ownership of a stock by mutual funds, banks, pension funds and other large institutions.

Institutional investors such as these have teams of analysts that research thousands of stocks, so it is good corroboration to see them buying a stock you’re considering.

Pandora Media Inc. (NYSE: P) 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,it allows for traders to make more useful judgments on trades.

With that in mind, Pandora Media Inc. (NYSE: P) now has a 50-day MA of $11.45 and 200-day MA of $12.59. It has traded in a 52-week range between $7.10 – 16.23 and today’s last price is 17.25%% lower than the 52 week high of $16.23.

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

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