Tumbling to a price of $17.89 during today's morning trading session, shares of America Movil are now -10.59% below their average target price of $20.01. Does this mean the stock will reverse course? Analysts are giving AMX an average rating of buy and target prices ranging from 15.0 to 23.53 dollars per share.
The market seems to share this optimistic view, since America Movil has a short interest of only 0.5% (this is the percentage of the share float that is being shorted). Each short position represents an investor's expectation that the price of the stock will decrease in the future.
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 America Movil has a low rate of institutional ownership at 5.7% 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 mixed market sentiment towards America Movil because of an analyst consensus of some upside potential, a buy rating, a very low short interest, 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 AMX:
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It has trailing 12 month earnings per share (EPS) of $0.91 per share
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America Movil has a trailing 12 month Price to Earnings (P/E) ratio of 19.7 while the S&P 500 average is 29.3
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The company has a Price to Book (P/B) ratio of 2.85 in contrast to the S&P 500's average ratio of 4.74
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America Movil is a Telecommunications company, and the sector average P/E and P/B ratios are 18.22 and 1.86 respectively
