Sotherly Hotels Inc. (SOHO) Stock Moves Down and Here’s Why

Sotherly Hotels Inc. (NASDAQ: SOHO) shares fell 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.

Shares of Sotherly Hotels Inc. (NASDAQ: SOHO) were downgraded by analysts at JMP Securities in a note to their investors today. JMP Securities currently has a rating of Market Perform on the shares. As a means of comparison, a number of other analysts have issued reports on the company recently, and Sotherly Hotels Inc. has secured a consensus one-year price target of $5.13, less than the opening price of $5.59, a difference of 9.28 percent. Sotherly Hotels Inc. stock has a 52-week high of $6.70. Downgrades occur when analysts feel that the future prospects for the security have dropped from the initial recommendation, usually due to a considerable and fundamental change in the company’s procedures, future vision or industry.

Sotherly Hotels Inc. (NASDAQ: SOHO) shares last traded at $5.53, a decrease of $0.15 per share or -2.64% compared to the previous closing price. Opening at $5.59, they varied from $5.45 and $5.59 throughout the day.

Sotherly Hotels Inc. (NASDAQ: SOHO) currently has a market cap of 82.67M.

Sotherly Hotels Inc. (NASDAQ: SOHO) Average Daily Trading Volume

The stock’s average daily volume is 41,877 shares out of a total float 10,697,000 and some 7,608 shares crossed the trading desk yesterday, below the norm. Momentum traders often use swings in trading volume to determine substantial volume aggregation or distribution by institutional investors, so look for trading volume to pick up in the coming days.

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

Institutional sponsorship commonly refers to 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 watching their interests is a good way to ensure you are buying the right stocks.

Sotherly Hotels Inc. (NASDAQ: SOHO) 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 identifying trends, moving averages allow traders to make those trends work in their favor and increase the number of successful trades.

With that in mind, Sotherly Hotels Inc. (NASDAQ: SOHO) now has a 50-day MA of $5.07 and 200-day MA of $5.45. It has traded in a 52-week range between $4.59 – 6.70 and today’s last price is 17.46%% lower than the 52 week high of $6.70.

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

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