Best Growth Stocks July 2021

The hallmark way we go about finding the best stocks…the outliers, is by looking for quiet Big Money trading activity.

Oftentimes, that can be institutional activity. We’ll go over what that looks like in a bit. But, the 5 stocks we see as long-term candidates are ATVI, SHOP, PYPL, GOOGL, & QFIN.

For MAPsignals, we believe the true tell on the near-term trajectory of the stock lies in the trading activity of the stock. The bottom line here is that oftentimes the manner in which a stock trades can oftentimes alert you to the forward fundamental picture more so than by simply looking at a company’s financials alone. We want the odds on our side when looking for the highest quality stocks.

Up first is Activision Blizzard, Inc. (ATVI), which is a leading gaming and entertainment firm. They have been cruising higher for years.

When we decide on the strongest candidate for long-term growth, we consider many technical areas important to success with a few for ATVI being:

  • 1-year performance (+36.17%)
  • YTD underperformance vs. NASDAQ ETF (-2.6% vs. QQQ)
  • Historical big money signals

Just to show you what our Big Money signal looks like, have a look at all of the top buy signals ATVI has made the past few years. That’s one strong uptrend. Green bars are showing that Activision Blizzard was likely being bought by a Big Money player according to MAPsignals.

It’s clear there’s a lot of green historically with this stock. That’s exactly what you want to see when looking for a great growth name. The lone red signal occurred during a broad market pullback:

Source: MAPsignals, End of day data sourced from Tiingo.com
Source: MAPsignals, End of day data sourced from Tiingo.com

On top of technicals, you need to look under the hood to see if the fundamental picture supports a long-term investment. As you can see, Activision’s revenue numbers have been strong:

  • 3-year sales growth rate (+6.09%)
  • 3-year earnings growth rate (+196.28%)

Next up is Shopify, Inc. (SHOP), which is an ecommerce software company. The company has been a huge winner over the years.

When we decide on the strongest candidate for long-term growth, we consider many technical areas important to success with a few for SHOP being:

  • 1-year performance (+62.22%)
  • YTD vs. technology ETF (+4.83% vs. XLK)
  • Recent big money signals

While the stock has outperformed recently, look at the long-term picture. These are the top buy signals Shopify has made since 2015. Clearly the Big Money has been consistent for years:

Source: MAPsignals, End of day data sourced from Tiingo.com

On top of a great long-term technical picture, one should also look under the hood to see if the fundamental picture supports a long-term investment. As you can see, Shopify has grown revenues massively:

  • 3-year sales growth rate = +64.02%
  • 3-year earnings growth rate = -63.12%

Another growth name to consider is PayPal Holdings, Inc. (PYPL), which is a leading digital payments company.

When we decide on the strongest candidate for long-term growth, we want to see a history of big money buying the shares. PayPal has that. Also, recent underperformance can be attractive:

  • 1-year performance (+74.5%)
  • YTD outperformance vs. technology ETF (+6.79% vs. XLK)

Below are the big money signals PayPal has made since 2015. After the pandemic lows, it’s been moon-bound:

Source: MAPsignals, End of day data sourced from Tiingo.com

On top of a strong technical picture, one should also look under the hood to see if the fundamental picture supports a long-term investment. PayPal’s growth rate is impressive. I expect more growth in the coming years:

  • 3-year sales growth rate = +17.96%
  • 3-year earnings growth rate = +36.06%

Number 4 on the list is Alphabet Inc. (GOOGL), which is the leader in online search amongst other growth areas. The shares have been in bull-mode the past couple of years.

When we decide on the strongest candidate for long-term growth, we consider many technical areas important to success with a few for GOOGL being:

  • 1-year performance (+72.37%)
  • YTD outperformance vs. technology ETF (+29.13% vs. XLK)
  • Historical big money signals

Below are the big money signals that GOOGL has made since 2015:

Source: MAPsignals, End of day data sourced from Tiingo.com
Source: MAPsignals, End of day data sourced from Tiingo.com

On top of the technical picture, one should also look under the hood to see if the fundamental picture supports a long-term investment. As you can see, Alphabet has been growing nicely:

  • 3-year sales growth rate = +18.06%
  • 3-year earnings growth rate = +60.69%

Our last growth candidate is 360 DigiTech, Inc. ADR (QFIN), which is a leading Chinese finance firm. The stock has zoomed recently.

When we decide on the strongest candidate for long-term growth, we consider many technical areas important to success with a few for QFIN being:

  • 1-year performance (+322.5%)
  • YTD outperformance vs. financials sector (+231.7% vs. XLF)
  • Historical big money signals

Below are the big money signals 360 DigiTech has made since 2019. You can see how powerful the performance has been the past year:

Source: MAPsignals, End of day data sourced from Tiingo.com

On top of the technical picture, one should also look under the hood to see if the fundamental picture supports a long-term investment. As you can see, 360 DigiTech has grown revenues massively over the past few years:

  • 3-year sales growth rate = +504.91%
  • 3-year earnings growth rate = -761.38%

The Bottom Line

ATVI, SHOP, PYPL, GOOGL, & QFIN represent top growth stocks for July 2021. Given the strong historical revenue & earnings growth, and multiple big money buy signals, these stocks could be worth extra attention.

To learn more about MAPsignals’ Big Money process please visit.

Disclosure: the author holds long positions in PYPL & GOOGL in personal and managed accounts. He holds no positions in ATVI, SHOP, & QFIN at the time of publication.

Investment Research Disclaimer

360 DigiTech, Inc.: Following the Big Money

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 360 DigiTech 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. The Big Money has been crazy about the shares this past 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 of the big money signals QFIN 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:

Source: www.mapsignals.com, End of day data sourced by Tiingo.com

In 2021 alone, QFIN made 22 of these rare signals. Generally speaking, that means more upside is ahead.

Now, let’s check out a few technicals grabbing my attention:

  • 1 year outperformance vs. market (+222% vs. SPY)
  • 1 year outperformance vs. Financials ETF (+197% vs. XLF)

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, 360 DigiTech has been growing sales at a breakneck pace. Take a look:

  • 3-year revenue growth rate (+504.91%)
  • 3-year earnings growth rate (-761%)

Source: FactSet

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

In fact, 360 DigiTech has been a top-rated stock at my research firm, MAPsignals, multiple times the last year. 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.

QFIN has been a constant Big Money favorite since 2021. And since its first appearance on this report, it’s up +129%:

Source: www.mapsignals.com, End of day data sourced from Tiingo.com

Let’s tie this all together.

360 DigiTech continues to fire on all cylinders technically and fundamentally. 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 QFIN rally likely has further upside. Big money buying in the shares is signaling to take notice. Shares could be positioned for a bounce soon. 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 QFIN at the time of publication.

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Learn more about the MAPsignals process here.

Disclaimer

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