So, what’s Big Money? That’s when a stock goes up in price alongside chunky volumes. It’s indicative of institutions betting on the shares.
Smart money managers are always looking for the next hot stock. And Roku has many fundamental qualities that are attractive.
This sets up well for the stock going forward. But how the stock trades is what points to more upside. As I’ll show you, the Big Money has been consistent in the shares for years.
You see, fund managers are always looking to bet on the next outlier stocks…the best in class. They spend countless hours sizing up companies, reading reports, speaking to analysts…you name it. When they find a company firing on all cylinders, they pounce in a big way.
That’s why I’ve learned how critical it is to gauge Big Money demand for shares. To show you what I mean, have a look at all of the big money signals ROKU has made the last year.
The last few days has seen Big Money activity, too. Each green bar signals big trading volumes as the stock ramped in price. Red signals are showing big selling in the shares:
In 2021, the stock has steadily gained. In June alone, ROKU made 4 of these rare green signals. This came after a big selloff earlier this year when growth stocks were under pressure. Generally speaking, recent green bars could mean more upside is ahead.
Now, let’s check out a few technicals grabbing my attention:
- YTD outperformance vs. market (+14.93% vs. SPY)
- YTD outperformance vs. technology ETF (+17.59% vs. XLK)
Outperformance is huge for leading stocks.
Next, it’s a good idea to check under the hood. Meaning, I want to make sure the fundamental story is strong too. As you can see, Roku has been growing revenues rapidly. Take a look:
- 3-year sales growth rate (+51.45%)
- 3-year earnings growth rate (-118.17%)
Marrying great fundamentals with technically superior stocks is a winning recipe over the long-term.
In fact, Roku has been a top-rated stock at my research firm, MAPsignals, multiple times the last few years. That means the stock has buy pressure, strong technicals, and growing fundamentals. We have a ranking process that showcases stocks like this on a weekly basis.
ROKU has been a constant Big Money favorite since 2019. And since its first appearance on this report, it’s up +391%:
I wouldn’t be surprised if Roku makes additional appearances in the years to come. Let’s tie this all together.
Roku continues to fire on all cylinders technically alongside growing sales. With many high-quality growth stocks beginning to breakout with Big Money, I like the long-term story of the stock.
The Bottom Line
The Roku rally could have further upside. Big money buying in the shares is signaling to take notice. Shares could be positioned for further upside. Given the historical gains in share price and strong fundamentals, this stock could be worth a spot in a growth-oriented portfolio.
Disclosure: the author holds no position in ROKU at the time of publication.
Learn more about the MAPsignals process here.