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When a company closes a Friday trading session with buying volume three or four times higher than daily average volume, it has most definitely piqued the curiosity of at least one major institutional investor. Frequently, the volume follows a better-than-expected earnings release. When it isn’t the case, alternative explanations spring to mind.
It’s possible that the artificial intelligence is churning out names based on data. It’s possible that the quants are working with PhDs who are looking at juicy metrics. It’s possible that he’s a billionaire who knows something. It’s possible that it’s a mix of all of the above.
Buying interest turning up on massive scale, for whatever reason, is absolutely worth paying attention to. It has that distinct “not joking around” character to it when it comes to the scope of the investment’s expectations. On a price chart, that type of action sticks out as well, so they’re easy to identify if you know where to look.
Here are four samples of traded shares on the New York Stock Exchange on Friday.
Hawaii’s Bank.
3 21 21. stockcharts.com, Bank of Hawaii daily price chart
ADDITIONAL INFORMATION FOR YOU
Since October/November 2020, most large bank equities, as well as the financial industry as a whole, have risen steadily. Bank of Hawaii isn’t one of the big money-center banks, but it isn’t falling behind on this trend.
Friday’s quadrupling of normal volume suggests that the company expects to keep performing well. At 260,000 shares per day, average daily volume is normally low. The yield on the dividend is 2.79 percent. At 5.98 percent, the short float is worth considering.
Clearway Energy is a company that specializes in renewable energy.
3 21 21. stockcharts.com, Clearway Energy daily price chart
A renewable energy company that pays a 4.9 percent dividend just experienced the highest one-day volume in its history. You might conclude from a stock chart that a significant investor or investment group has judged that the January sell-off is over or nearly finished.
Huntsman Corporation is a company that specializes in hunting.
Huntsman Corp. daily price chart, stockcharts.com, 3 21 21.
On Friday, the chemical-focused basic materials company traded at nearly four times its normal volume. Huntman’s earnings were in the red last year, but it appears that some investors now believe they are likely to rebound.
The price/earnings ratio of 24 is lower than the S&P 500’s p/e of around 40, and the stock’s book value is 1.83. All of this, plus a dividend yield of 2.23 percent, may make it a “bargain stock.”
Williams Sonoma is a well-known retailer.
3 21 21. stockcharts.com Williams Sonoma daily price chart
The corporation revealed on Thursday that its earnings for the previous quarter were greater than projected. On Friday, they announced an increase in the dividend. It’s the Williams Sonoma one-two punch, and the volume of purchases demonstrates how much investors value quality work. I haven’t checked, but I’m very sure this stock isn’t included in the “innovation” ETF’s holdings.
There are no guarantees that equities that trade in large volumes will trend upward in price. It’s just one of many important elements to consider in any circumstance. Before making any judgments, investors should consider the overall context for such intense trading.
FinViz.com provided the statistics.
I am not a shareholder in any of these companies. There are no recommendations offered in either direction. If you’re an investor, you’ll want to investigate each of these scenarios in depth. Trading or investing in stocks and other instruments can lead to financial loss. Always conduct your own research and due diligence before seeking professional advice from a licensed investment advisor. Continue reading
