Money Markets

Should Investors Take a Bite out of FLIR Systems, Inc. (FLIR)?

Latest evolution in the price of FLIR Systems, Inc. (NASDAQ:FLIR) stock has been one of the most talked about matter among the interested investors. At the end of the day, it’s only a stock’s performance that matters. With this in mind, it’s worth taking a look at the chart to get a sense of where it might be headed in the future.

How has the stock performed recently?

FLIR Systems, Inc. (NASDAQ:FLIR) in the last month has increased +8.79%. Shares are now up over the past year, outperforming the broad market by -100% and outperformed a peer group of similar companies by 21%. After the latest session, which saw the stock close at a price of $42.58, FLIR sits below its 52-week high. FLIR Systems, Inc. (NASDAQ:FLIR) has been trading in a bullish manner, based on the relative positions of the stock’s 20 and 200 day moving averages.

Momentum indicators

Of course, these surface-level price movements don’t tell us much about the direction that FLIR may be headed in the future. To do this, analysts often study the speed and magnitude of a stock’s price movements with what are known as momentum indicators. The logic is that as a stock’s momentum slows, it may be nearing key support or resistance levels and possibly 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 FLIR is 71.96%, which suggests that the stock may be primed for a trend reversal or a corrective pullback in price. The 20-day Stochastic %k measure, which sits at 92.12%, tells a similar story, and suggests that FLIR currently trades in overbought 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. FLIR Systems, Inc. (FLIR) average trading volume of 1,270,475 during the past month is 39.19% above its average volume over the past year, indicating that investors have been more active than usual in the stock in recent times.

What do the analysts think?

FLIR is currently overvalued by 3.02% relative to the average 1-year price target of $41.33 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 FLIR over the next year.

How risky is the stock? 

When predicting the future performance for a stock, it’s also important to take into account risk. To do this, analysts often use a stock’s beta, which measures the stock’s volatility relative to the overall market.

FLIR Systems, Inc. (NASDAQ:FLIR) has a beta of 0.57, 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. FLIR therefore has a below average level of market risk. During the past couple of weeks, FLIR average daily volatility was 24.03%, which is -4.78 percentage points higher than the average volatility over the past 100 days.

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