Best Oversold Stocks to Buy for January 2022

At my research firm, MAPsignals, we track the Big Money looking for trends. We believe Big Money analysis can alert you to market and sector trends. Here’s what daily buys and sells looks like over the last six months. It’s been choppy:

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That’s what a rotational market looks like. See the red bars? Those are stocks we believe are getting sold. When red bars run rampant, good names can get crushed. They can become what I call “oversold.”

And that can mean opportunity. Let’s look at five stocks seeing lots of red that appear to be near-term oversold: ROKU, BABA, RH, ZM & ETSY.

Up first is Roku, Inc. (ROKU), the television streaming platform.

Even though great companies’ stocks can be volatile, like ROKU over the past year, they’re worthy of attention, especially on pullbacks. Check out ROKU:

  • 1-month performance (-24.2%)
  • Recent Big Money sell signals

To show you what our Big Money signals looks like on a stock, have a look at all the buys (green bars) and sells (red bars) in ROKU over the past year:

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Clearly, that’s a lot of red since September.

Looking more broadly, Roku has been a high-quality stock for years. The blue bars in the chart below show when ROKU was likely being bought by a Big Money player and also a high-ranking stock, according to MAPsignals.

When you see a lot of blue, like ROKU did in 2019 (when it hovered around half of its current price), it can be very bullish:

Source: www.MAPsignals.com

Those blue signals indicate Big Buying and strong fundamentals. As you can see, Roku’s recent numbers have been strong, making it worth of attention at these levels:

  • 1-year EBITDA growth rate (+18.9%)
  • 1-year sales growth rate (+57.5%)

Next up is Alibaba Group Holding Ltd. (BABA), which is a Chinese technology giant – it’s like China’s Amazon.

Check out these technicals for BABA:

  • 1-month performance (7.5%)
  • Recent Big Money signals

It’s been getting hammered for more than a year:

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But now let’s look long-term. These are the top buy signals Alibaba has made since 2016. The Big Money has been all over it for a while:

Source: www.MAPsignals.com

Let’s look under the hood. As you can see, Alibaba has had rock-solid, double-digit growth in earnings and revenue:

  • 1-year EBITDA growth rate = (+17.4%)
  • 1-year sales growth rate = (+44.6%)

Another growth name is Restoration Hardware (RH), which is a luxury home furnishings retailer.

Strong candidates for growth usually have Big Money buying the shares. RH has historically had that. But recently, it’s full of red which could be an opportunity:

  • 1 month performance (-19.6%)
  • Historical Big Money signals

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Below are the blue Big Money signals RH has made since 2015. That’s the JUICE!

Source: www.MAPsignals.com

Now let’s dig deeper. RH’s growth in earnings is impressive, as is its sales growth. I expect more of the same in the coming years:

  • 1-year EBITDA growth rate = (+10.7%)
  • 1-year sales growth rate = (+7.6%)

Number four on the list is Zoom Video Communications, Inc. (ZM), which is a video conferencing platform and popular “stay-at-home” stock.

Here are the technicals important to me:

  • 1 month performance (-12.2%)
  • Historical Big Money signals

Recently, it’s been a choppy downward slide, with more Big Money selling than buying:

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But not long ago, Zoom was a Big Money darling. Below are the Big Money buy signals for ZM since it’s 2019 trading debut:

Source: www.MAPsignals.com

Let’s look under the hood. Despite its price slide, Zoom has been growing earnings nicely and generated huge sales growth:

  • 1-year EBITDA growth rate = (+6.4%)
  • 1-year sales growth rate = (+325.8%)

Our last growth candidate is Etsy, Inc. (ETSY), which is an online marketplace and commerce platform. A strong final quarter in 2021 of Big Money buying has given way to steep declines:

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Check out these technicals:

  • 1-month performance (-24.1%)
  • Historical Big Money signals

Etsy is a high-quality stock since it’s made my Top 20 report. As you can see below, it’s been a Big Money favorite since 2016. Right now, it’s on a pullback and could be an opportunity.

Source: www.MAPsignals.com

Now let’s look below the surface a bit. Earnings have been growing quite well, and there’s been enormous sales growth:

  • 1-year EBITDA growth rate = (+16.2%)
  • 1-year sales growth rate = (+110.9%)

The Bottom Line

ROKU, BABA, RH, ZM & ETSY represent the top oversold stocks for January 2022. They’ve been sold a lot lately…perhaps too much. Strong, fundamentally-sound stocks seeing near-term sell signals are worthy of extra attention because of their long-term potential.

To learn more about MAPsignals’ Big Money process please visit: www.mapsignals.com

Disclosure: the author holds long positions in ROKU, BABA, ZM & ETSY in managed accounts.

Investment Research Disclaimer

https://mapsignals.com/contact/

 

Best Growth Stocks December 2021

For years, growth stocks have been beneficiaries of outsized gains compared to the averages. The best growth stocks have 3 traits: strong fundamentals, great technicals, and a history of Big Money activity in the shares. Outlier stocks see a lot of Big Money buying.

Oftentimes, that can be institutional activity. We’ll go over what that looks like in a bit. But the five stocks we see as long-term candidates will make you SMILE: SHOP, MIME, INMD, LRCX, & ETSY. 😊

For MAPsignals, we believe that Big Money trading can alert you to the forward fundamental picture of a stock. We want the odds on our side when looking for the highest quality stocks.

Up first is Shopify, Inc. (SHOP), which is an online commerce platform.

Even though their stocks can be volatile, like SHOP this year, great companies are worthy of attention. Check out SHOP:

  • 1 month performance (+17.6%)
  • Historical big money signals

Just to show you what our Big Money signal looks like, have a look at the top buy signals Shopify has made the past few years.

Blue bars are showing that SHOP was likely being bought by a Big Money player according to MAPsignals.

When you see a lot of them, like SHOP did in 2019 (when it hovered around 1/4 of its current price), I call it the stairway to heaven:

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Source: www.MAPsignals.com

But, what about fundamentals? As you can see, Shopify’s revenue numbers have been strong:

  • 1-year sales growth rate (+71.3%)
  • 3-year sales growth rate (+64.0%)

Next up is Mimecast Limited (MIME), which is a cloud software and risk management company.

Check out these technicals for MIME:

  • 1-month performance (+29.1%)
  • Recent big money signals

Let’s look long-term. These are the top buy signals Mimecast has made since 2015. The Big Money may have found a new gem:

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Source: www.MAPsignals.com

Let’s look under the hood. As you can see, Mimecast has had rock-solid growth:

  • 3-year sales growth rate = 24.3%
  • 3-year earnings growth rate = 58.3%

Another growth name is InMode Ltd. (INMD), which is a maker of specialized medical equipment.

Strong candidates for growth usually have big money buying the shares. InMode has that. Also, the stock has bounced recently:

  • 1 month performance (+13.6%)
  • Historical Big Money signals

Below are the big money signals InMode has made since 2019. That’s the JUICE!

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Source: www.MAPsignals.com

Now let’s look under the hood. InMode’s sales growth is impressive. I expect more growth in the coming years:

  • 3-year sales growth rate = +58.4%
  • 3-year earnings growth rate = +119.7%

Number four on the list is Lam Research Corporation (LRCX), which is a leading semiconductor industry supplier.

Here are the technicals important to me:

  • 1 month performance (+12.4%)
  • Historical big money signals

Below are the big money signals for LRCX since 2015:

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Source: www.MAPsignals.com

Let’s look under the hood. Lam Research has been growing nicely:

  • 3-year sales growth rate = +12.3%
  • 3-year earnings growth rate = +26.9%

Our last growth candidate is Esty, Inc. (ETSY), which is another top online commerce platform.

Check out these technicals:

  • YTD performance (+29.7%)
  • Historical big money signals

Etsy is a high-quality stock since it’s made my Top 20 report:

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Source: www.MAPsignals.com

Now look under the hood. Earnings have been growing quite well:

  • 3-year sales growth rate = +61.1%
  • 3-year earnings growth rate = +92.4%

The Bottom Line

SHOP, MIME, INMD, LRCX, & ETSY (😊) represent top growth stocks for December 2021. Strong fundamentals and big money buy signals make these stocks worthy of extra attention.

To learn more about MAPsignals’ Big Money process please visit: www.mapsignals.com

Disclosure: the author holds long positions in ETSY, LRCX & INMD in managed accounts and LRCX in personal accounts.

Investment Research Disclaimer

https://mapsignals.com/contact/

 

Etsy Stock Is A Big Money Favorite

So, what’s Big Money?

Said simply, 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 Etsy has many fundamental qualities that are attractive.

This sets up well for the stock going forward. But how the shares have been trading points to more upside. As I’ll show you, the Big Money has been consistent in the shares all year.

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 the big money signals ETSY has made the last year.

The last few weeks have seen Big Money activity, too. Each green bar signals big trading volumes as the stock ramped in price:

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Source: www.mapsignals.com

In 2021, the stock has attracted 11 Big Money buy signals. Generally speaking, recent green bars could mean more upside is ahead.

Now, let’s check out technical action grabbing my attention:

  • 1-month outperformance vs. Consumer Discretionary Select Sector SPDR Fund (+4.3% vs. XLY)

Outperformance is important 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, Etsy has been growing sales at a double-digit rate. Take a look:

  • 3-year sales growth rate (+61.1%)
  • 3-year earnings growth rate (+92.4%)

Source: FactSet

Marrying great fundamentals with technically superior stocks is a winning recipe over the long-term.

In fact, ETSY has been a top-rated stock at my research firm, MAPsignals, for years. That means the stock saw buy pressure, strong technicals, and growing fundamentals. We have a ranking process that showcases stocks like this on a weekly basis.

ETSY has a lot of qualities that are attracting Big Money. And since 2015, it’s made this list 12 times, with its first appearance on 10/18/2016… and gaining 1,576.65% since. The blue bars below show the times that Etsy was a top pick since 2015:

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Source: www.mapsignals.com

It’s been a top stock in the consumer discretionary sector according to the MAPsignals process. I wouldn’t be surprised if ETSY makes additional appearances in the years to come. Let’s tie this all together.

The Bottom Line

The Etsy rally could have further to go. 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 ETSY positions in personal and managed accounts at the time of publication.

Learn more about the MAPsignals process here.

Disclaimer

Today’s Market Wrap Up and a Glimpse Into Thursday

Stocks tumbled today in response to weaker than expected jobs data. The Dow Jones Industrial Average took the brunt of it, falling more than 300 points and shaving nearly 1% off its value. The S&P 500 was down half a percent while the Nasdaq managed to eke out fractional gains.

Investors were spooked by an ADP jobs report, which revealed that jobs are being added to the private sector at a slower pace than expected. In July, companies added 330,000 payrolls while economists were looking for something along the lines of 690,000. In addition, the outlook for the delta variant isn’t getting any better, and investors are watching and waiting to see if renewed lockdowns will be implemented.

Stocks to Watch

Uber shares are getting punished in extended hours, falling nearly 4% at last check. The ride-share company narrowed its Q2 loss to USD 509 million, but it was still steeper than Wall Street was expecting. Uber and Lyft are both facing driver constraints that have been exacerbated by the resurgence of the virus. On the bright side, Uber had record bookings while revenue grew twofold.

Robinhood shares rallied 50% during the regular session, and according to reports, it was retail investors driving the price higher. Fidelity reportedly had close to 10K buy orders by individual investors early in the session, far outpacing the second most in-demand stock at the broker, GM.

Shares Etsy, an e-commerce site for handcrafted items, dropped 13.5% in extended hours amid signs that the pandemic-fueled shopping boom is winding down. Etsy’s Q2 sales increased by a double-digit percentage but it was less robust than recent quarters. Meanwhile, the company’s Q3 revenue outlook came in below consensus estimates.

Roku’s stock fell more than 8% in the after-hours. The video-streaming hardware company’s Q2 results fell short of estimates as the opening of the economy cut into users’ streaming time. Roku had 55.1 million active users in the quarter across more than 17 billion hours of streaming. The company continues to operate in an uncertain environment while comps from the pandemic year will remain a challenge for the rest of 2021.

Look Ahead

Investors will be on pins and needles until Friday when the employment report for the month of July is released. In the interim, stock futures are barely moving in the after-hours on Wednesday evening, with the three major stock market indexes leaning toward green.

Etsy Eyes Gen-z Shoppers With $1.63 Billion Deal for Fashion Reseller Depop

After a pandemic-driven surge in sales over the last year, Etsy, among the world’s best known e-commerce platforms for handmade goods and vintage items, estimates the U.S. second-hand clothing market alone will be worth $64 billion by 2024.

Chief Executive Officer Josh Silverman said in statement he saw Depop as “the resale home for Gen-Z consumers” and believed there was significant potential to scale up its business as he seeks to offset the return of consumers to more traditional mall and high street shopping over the next year.

London-based Depop, founded in 2011, is known for its vintage and streetwear collections and has more than 26 million users from over 147 countries.

About 90% of its users are under the age of 26 and it is the 10th most visited shopping site among Gen-Z consumers in the U.S., according to the company.

Surveys show that greater awareness of the impact of the apparel industry on the environment is also driving younger audiences towards second-hand apparel, while “thrift haul” videos on YouTube and TikTok, which show cheap purchases by people, have accumulated millions of views.

The boom has prompted companies including Gap Inc, Vera Bradley and celebrities including Serena Williams to partner with other sector players Poshmark and ThredUp.

Etsy’s revenue more than doubled to $1.73 billion last year, as shopping shifted online and consumers sought handmade pandemic-related items like masks, but the company has warned that growth would slow as consumers return to malls and physical stores.

(Reporting by Nivedita Balu in Bengaluru;Editing by Vinay Dwivedi)

Will Earnings Season Bring Volatility To The Stock Market?

The Commerce Department last week reported that the U.S. economy grew at a +6.4% annual rate in the first quarter, slightly below estimates but still strong. If it would have come in real hot and much higher bears would have pointed to fanning the inflation flames even further.

This mindset of “bad-news-could-be-good-news” is helping to keep the stock market at or near all-time highs. If economic data somewhat disappoints it means the Fed stay dovish and accommodative for longer.

Fundamental analysis

That might be important to keep in mind as April data starting this week is expected to be extremely good. The April Employment Report is due next Friday and with upper-end of Wall Street estimates look for upwards of +1 million new jobs being added. Other key April data next week includes the ISM Manufacturing Index on Monday, and the ISM Non-Manufacturing Index on Wednesday.

employment

If the data comes in better than expected the bears will win the nearby battle and have the upper hand when talking higher inflation and the Fed perhaps tightening sooner than anticipated. So this week could be a bit tricky whereas “disappointing-data” could actually be digested as a win for the bulls and “strong data” a win for the bears.

The earnings calendar is packed again next week with big names including Activision Blizzard, Adidas, AllState, Cerner, Cigna, CVS, Dominion Energy, Enbridge, Etsy, Hilton Worldwide, Moderna, Monster Beverage, Nintendo, PayPal, Peloton, Pfizer, Rocket Companies, Square, TMobile, Wayfair, and Zoetis.

COVID-19

Checking in on U.S. progress against Covid-19, the number of adults that have received at least one dose is around 60%-65%, depending on the source. Global cases continue to rise led by India, where new infections have been hitting new record highs every day for weeks now. The country reported a staggering 380k new infections and 3,645 new deaths on Thursday while less than 10% of the population has been vaccinated.

Bottom line, the global restart will not be synchronized like many bulls had hoped would be the case and global growth may continue to struggle. At the moment the U.S. market doesn’t seem to care. It will be interesting to see if increasing inflation and continued global headwinds will eventually come home to roost.

SP500 technical analysis

SP500 earnings season

Earnings season can bring volatility to the stock market. At the beginning of May, cycles turn to the downside. Note, this is only a timing tool and it never shows the amplitude or strength of the move. When cycles are topping, it means we can expect a move down or choppy trading. This is it.

But relying on cycles only is not a good idea. Insider Accumulation Index shows bearish divergence on a daily chart. At the same time, Advanced Decline Line is still strong. The key resistance is around 4250 at the moment. I believe earning season can bring a profit booking to the stock market. If that happens, watch 4000 – 39500. It was a massive resistance and now it might turn into support. Intermarket Forecast is neutral. But if it turns to the downside, we will finally see a pullback in SP500.

For a look at all of today’s economic events, check out our economic calendar.