During the recent trading sessions stock of Altria Group, Inc. (NYSE:MO) was gathering the crowd in the stock market. Many analysts use price trends and patterns to predict future performance, and we can glean some important insights about MO by examining the chart.
How has the stock performed recently?
Altria Group, Inc. (NYSE:MO) in the last month has decreased -4.84%. Shares are now down -1.33% over the past year, underperforming the broad market by -107.67% and underperformed a peer group of similar companies by -122%. After the latest session, which saw the stock close at a price of $62.28, MO sits -19.94% below its 52-week high. Altria Group, Inc. (NYSE:MO) has been trading in a bearish manner, based on the relative positions of the stock’s 20 and 200 day moving averages.
Of course, these surface-level price movements don’t tell us much about the direction that MO may be headed in the future. If we want to get a sense of MO’s future performance, we have to look at the speed and size of these price movements. Using what are known as momentum indicators, we can use the stock’s price momentum to get a sense of whether the stock is in the midst of, or nearing the end of, a current trend. Two such indicators are the RSI (Relative Strength Index) and the Stochastic %k Oscillator, which fluctuate on a scale of 0 to 100. A reading above 70 indicates that a stock is overvalued, and a reading below 30 implies that it is undervalued. The 20-day RSI for MO is 31.16%, which suggests that the stock is not particularly expensive or cheap, and not predisposed to a reactive price movement based on this measure. The 20-day Stochastic %k measure, which sits at 12.71%, tells a different story, and suggests that MO currently trades in oversold territory.
What do the trading volumes reveal?
Analysts use volume trends to assess the level of conviction behind a stock’s price changes. When volumes suddenly increase above normal levels, it can be a sign that investors feel very strongly in one way or the other about the future direction of a stock, or may even have access to inside information. Altria Group, Inc. (MO) average trading volume of 6,559,835 during the past month is 1.45% below its average volume over the past year, indicating that investors have been less active than usual in the stock in recent times.
What do the analysts think?
MO is currently undervalued by -13.13% relative to the average 1-year price target of $71.69 taken from a group of Wall Street Analysts. The average investment recommendation on a scale of 1 to 5 (1 being a strong buy, 3 a hold, and 5 a sell) is 2.20, which implies that analysts are generally neutral in their outlook for MO over the next year.
How risky is the stock?
When analyzing a stock’s price performance, it’s essential to take risk into account. Beta, which measures a stock’s volatility relative to the overall market, can be used to gauge the level of systematic risk associated with a particular stock.
Altria Group, Inc. (NYSE:MO) has a beta of 0.67, compared to a beta of 1 for the market, which implies that the stock’s price movements are less extreme than the market as a whole. MO therefore has a below average level of market risk. During the past couple of weeks, MO average daily volatility was 9.23%, which is 10.95 percentage points lower than the average volatility over the past 100 days.