Market Reaction to VFS Stock Decline

By Emilio Sanchez • Tuesday, July 23 15:08 • Permanent Link

One of the standouts of today's afternoon trading session has been VinFast Auto, which logged a -2.9% drop and underperformed the S&P 500 by -3.0%. The Blank Checks stock is now trading at $4.38 per share and is -48.46% below its average target price of $8.5. Analysts have set target prices ranging from $5.0 to 13.0 dollars per share, and have given the stock an average rating of buy.

We can use VinFast Auto's short interest as a proxy for determining general market sentiment regarding the stock. The short interest is the percentage of the share float that represents short positions, meaning that the investor believes the stock will decline in the future. Since VFS's short interest is 7.3%, the market sentiment is mixed on this stock.

When a stock is sold short, it means an investor has borrowed shares of the stock from their broker, and then sold them at the going market price. The investor hopes for the price to decline, so that they might buy those shares back at a lower price in the future. Once they do, they can return the borrowed shares to their broker, and keep the profit they made on the transaction.

One way to tell how the market is perceiving a stock is to look to its rate of institutional ownership. With their vast resources, hedge funds, pension funds, and wealth managers are able to perform due diligence to a level that most investors cannot. So it follows that their investment decisions may be more educated. But we also know that bankers and portfolio managers can make mistakes too.

So the fact that VinFast Auto has a low rate of institutional ownership at 0.2% is not an immediate red flag. It just means that something about the company has kept institutional investors from committing -- or the stock is simply flying under their radar.

Overall, there is positive market sentiment towards VinFast Auto because of an analyst consensus of strong upside potential, a buy rating, an average amount of shares sold short, and a very small number of institutional investors. Investors should not base their decisions on market sentiment only, they should also be aware of a stock's fundamentals before committing.

At a glance, here are some essential statistics you may want to know about VFS:

It has trailing 12 month earnings per share (EPS) of $-0.98 per share
VinFast Auto has a trailing 12 month Price to Earnings (P/E) ratio of -4.5 while the S&P 500 average is 28.21
VinFast Auto is a Finance company, and the sector average P/E and P/B ratios are 19.48 and 1.85 respectively

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.