The recent progress in the stock of Sirius XM Holdings Inc. (NASDAQ:SIRI) has alerted everyone to look out for right opportunity to invest. 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?
Sirius XM Holdings Inc. (NASDAQ:SIRI) has been trading in a bullish manner, based on the relative positions of the stock’s 20 and 200 day moving averages. In the last month, the price of SIRI has increased +6.75%. Shares are now up over the past year, outperforming the broad market by -100% and underperformed a peer group of similar companies by -187%. After the latest session, which saw the stock close at a price of $5.85, SIRI sits below its 52-week high.Momentum indicators
Of course, these surface-level price movements don’t tell us much about the direction that SIRI may be headed in the future. If we want to get a sense of SIRI’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 SIRI is 55.91%, 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 51.65%, tells a similar story, and suggests that SIRI currently trades in neutral territory.What do the trading volumes reveal?
In addition to price, analysts use volume trends to predict future performance. The level of trading activity in a stock is often a good proxy for the level of interest and enthusiasm for the name within the investment community. A sudden increase in activity can be a sign that investors are trading in anticipation of a catalyst. Sirius XM Holdings Inc. (SIRI) average trading volume of 24,854,240 during the past month is 21.12% above its average volume over the past year, indicating that investors have been more active than usual in the stock in recent times.
SIRI is currently undervalued by -6.1% relative to the average 1-year price target of $6.23 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 2.40, which implies that analysts are generally neutral in their outlook for SIRI over the next year.How risky is the stock?
In order to put SIRI’s recent price performance into context, we need to get a sense of how the stock moves in relation to the overall market. Beta, which measures a stock’s price volatility relative to the market, provides the cleanest measure of systematic risk for a stock.
Sirius XM Holdings Inc. (NASDAQ:SIRI) has a beta of 1.07, compared to a beta of 1 for the market, which implies that the stock’s price movements are more extreme than the market as a whole. SIRI therefore has an above average level of market risk. During the past couple of weeks, SIRI average daily volatility was 23.50%, which is -1.24 percentage points higher than the average volatility over the past 100 days.