Historical Performances are Key to Consider – Medtronic plc (NYSE: MDT)

The Dow Jones industrial average erased a nearly 400-point loss Thursday afternoon as tailwinds from strong earnings assisted the index snap a four-day losing streak.

The Dow Jones industrial average edged out a 5.17 points gain to finish at 23,930.15 by the closing bell after falling nearly 400 points in morning trading. The S&P 500 closed down 0.23 percent to close at 2,629.73 after dropping as much as 1.6 percent. Both indexes also dipped below their 200-day moving averages, but were back above those levels by the end of the session.

The Nasdaq composite fell 0.18 percent after dropping more than 1 percent, ending the day at 7,088.15. The Nasdaq pared losses later in the day was buoyed by a rebound in Amazon and Apple shares in addition to a 0.6 percent gain in software giant Microsoft. Enterprise technology company Cisco added 1.32 percent.

Boeing — which has struggled for gains since reporting earnings last week — carried the Dow higher, with the aircraft manufacturer rallying 2 percent. Shares of fellow industrial company 3M gained 0.61 percent.

The afternoon rally came after a sharp fall in equities earlier in the session, as a batch of better-than-predictable earnings failed to push the major averages higher while trade and geopolitical concerns mounted.

Tesla stated better-than-forecast quarterly results Wednesday after the close. However, the stock fell 5 percent after CEO Elon Musk dismissed questions from analysts regarding gross margins and Model 3 production.

Meanwhile, Church & Dwight, Blue Apron and Express Scripts also posted results that beat the Street’s forecasts. (Source: CNBC)

Hot Stock Analysis: Medtronic plc (NYSE: MDT)

Investors rushed to trade on Medtronic plc (NYSE: MDT) Thursday, soon after a drastic change of -0.43% in the share price was observed and the stock become able to close its trade at $79.58. The stock becomes active when traders or investors changed hands with 4,522,045 shares contrast to the three-month volume average of 5.31M shares. The ratio between current volume and 3-month average value, also known as Relative volume was observed at 0.85, validating the stock’s In Play state.

Stock Technical’s & Performances to Explore:

Based on a recent bid, this stock (MDT) was trading at a distance of -11.30% from 52-week high and 4.15% away from its 52-week low price. We observed -1.25% rate of return for a stock for the last 5-trading days, which was maintained for the month at 1.09%. Likewise, the performance for the quarter was recorded as -6.35% and for the year was -5.36%. The comparison of these above mentioned historical values gives an idea to investor whether the stock is ready to shift trend (up to down or down to up) or how the stock has recovered the losses or shed gains during its historical phase. For example, if stock’s weekly and monthly performances are positive as compared to year and YTD performance percentage also seems to decrease in comparison to the previous year performance, then one can say that the stock is bouncing back and may able to gain more and more in near future and vice versa. Although stock’s historical performances are key to consider, don’t invest (or not invest) based solely on it. It’s just one measure of value. As a serious shareholder, you need to look at plentiful factors that can assist you determine whether any given stock is a good investment.

Simple Moving Averages (SMAs) in Focus:

Moving averages is one of the key indicator and the most powerful tool used by traders. A simple moving average is easy to calculate, which allows it to be employed fairly quickly and easily. A textbook definition of a moving average is an average price for a security using a specified time period. The simplest form of a moving average, appropriately known as a simple moving average (SMA), is calculated by taking the arithmetic mean of a given set of values. For example, to calculate a basic 10-day moving average you would add up the closing prices from the past 10 days and then divide the result by 10. If a trader wishes to see a 50-day average instead, the same type of calculation would be made, but it would include the prices over the past 50 days and the same process goes on for 200 days.

Do SMAs Signal a Trend Reversal?

Based on a recent bid, this stock (MDT) was trading at a distance of -0.29% from 20 days simple moving average, and its distance from 50 days simple moving average is -0.56% while it has a distance of -2.12% from the 200 days simple moving average. A moving average’s greatest strength is its ability to assist a trader identifies a current trend or spots a possible trend reversal. Moving averages can also identify a level of support or resistance for the security, or act as a simple entry or exit signal.

Stock’s Volatility Analysis:

Volatility is the degree of variation of a trading price series over time as measured by the standard deviation of logarithmic returns. It generally deals with the amount of uncertainty or risk about the size of changes in a security’s value. It can either be calculated by means of the standard deviation or variance between returns from that same security or market index. The Rule of thumb is higher the volatility, the riskier the security. A higher volatility means that a security’s value can potentially be spread out over a larger range of values. This means that the price of the security can change dramatically over a short time period in either direction. A lower volatility means that a security’s value does not fluctuate dramatically, but changes in value at a steady pace over a period of time.

What about MDT Stock’s Volatility?

According to finviz data, MDT stock’s volatility for the week is measured at 1.69%, while for the month it is maintained at 1.64%.

An Eye on Beta Factor:

One gauge of the relative volatility of a specific stock to the market is its beta. A beta approximates the overall volatility of a security’s returns against the returns of a relevant benchmark (usually the S&P 500 is used). Presently, Beta factor for MDT stock stands at 0.95. A beta of 1 indicates that the security’s price moves with the market. A beta of less than 1 means that the security is theoretically less volatile than the market. A beta of greater than 1 indicates that the security’s price is theoretically more volatile than the market. For example, if a stock’s beta is 1.2, it’s theoretically 20% more volatile than the market. Conversely, if an ETF’s beta is 0.65, it is theoretically 35% less volatile than the market. Therefore, the fund’s excess return is predictable to underperform the benchmark by 35% in up markets and outperform by 35% during down markets.

What Do Analysts’ Recommend?

Analysts mean recommendation for the stock is 2.20, (where 1 is Strong Buy and 5 is Strong Sell).

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Adler Smith

Adler Smith

I am Adler Smith and I’m passionate about business and finance news with over 5 years in the industry starting as a writer working my way up into senior positions. I am the driving force behind “Stocks Pen” with a vision to broaden the company’s readership throughout 2016. I am an editor and reporter of news about “Healthcare” Sector Companies.