Bitcoin Hasn’t Hit Rock Bottom Yet: Is The Crypto Winter Going to End or Has It Only Just Begun?

The price of Ethereum (ETH-USD) has also dropped by nearly 70% over the past three months for the first time in the history of the largest altcoin by capitalization.

The crisis in the cryptocurrency market has led to massive layoffs and liquidations in many large crypto companies, and crypto lending platforms are now under threat of bankruptcy. Coinbase and Crypto.com announced more than 1400 layoffs, the largest crypto investment fund Three Arrows Capital went into liquidation, and lending company Celsius suspended withdrawals for customers.

Mining companies faced difficulties due to falling profitability and began to sell mined Bitcoins to pay their operating costs and cover loans.

External Factor Pressure

The price of Bitcoin is largely correlated with the situation in the US stock market. The stock sell-off has seriously impacted Bitcoin and the crypto market as investors are doing away with risky assets.

In the second quarter, the US Federal Reserve implemented two aggressive interest rate hikes to cope with record-high inflation, fueling fears of a global recession. As a result, the percentage-wise decline in traditional asset indices has reached double-digit values.

The hardest hit were the stocks of high-growth technology names — the Nasdaq Composite dropping by 22.4% in the second quarter and showing its worst quarterly performance over 14 years.

Bitcoin has never experienced such strong pressure from external factors as it is now. Since the beginning of the year, the cryptocurrency has lost 57.3% in price, twice as much as the S&P 500 (-20.6%). Those who bought shares of companies such as PayPal (-64.2%), Netflix (-70%) and Shopify (-77%), suffered more losses. Even classic portfolio strategies in the US are showing their worst performance since the 2008 global financial crisis.

Still Falling

There are no reasons in sight for a change in the global downtrend in the market. From the point of view of macro prospects, a change in the trend for Bitcoin is possible only with the change in the rhetoric of the US Federal Reserve to a friendlier stance towards the stock markets. The prerequisite is the normalization of inflation and the stabilization of the economy.

Even worse, the likelihood of a further price decline is only increasing. In his recent speech to the US Congress, the head of the Fed acknowledged that there is a possibility of a recession. Previously, high growth in food prices against the backdrop of low unemployment was a typical picture on the eve of economic downturns.

The negative sentiment towards digital currencies on the part of regulators was exacerbated by the collapse of the TerraUSD stablecoin, as a result of which global authorities started talking about the shortcomings of the digital currency market and the need for stricter regulation.

No End In Sight?

Improvements in the stock exchange market are unlikely in the near future, which means that the price of Bitcoin in the third quarter will not demonstrate growth. A lot will also depend on geopolitics, new economic measures, prices for commodities, and the results of the elections to the US Congress in early November.

Some experts predict a possible rebound in the price of Bitcoin to $25,000. But, subsequently, there is a high chance that the cryptocurrency will continue to fall and begin a long consolidation in search of price lows below the $10,000 mark. Psychological factors are also playing against Bitcoin.

During a downtrend, positive news does not contribute to cryptocurrency exchange rates growth, while negative news, on the contrary, has a negative effect on the price. New price lows can provoke traders to a new reset of the cryptocurrency throughout the market. On the other hand, it can be an entry point for market newcomers looking to take advantage of the low price.

In many ways, long-term investors are guided by 2024, when the next Bitcoin halving will take place. The price of the coin will most likely update its historical highs after the landmark event, just as it has in the past history of the oldest cryptocurrency.

In any case, it can be quite a risky venture to buy any cryptocurrency now, as top instruments may well lose another 50% to 70% of their current value.

Shopify Is Down By 17%, Here Is Why

Key Insights

  • Shopify’s first-quarter report missed analyst estimates on both earnings and revenue. 
  • The company announced that it would buy Deliverr for $2.1 billion. 
  • Shopify stock remains expensive even after the huge pullback from November highs. 

Shopify Stock Falls After Disappointing Q1 Report

Shares of Shopify  gained strong downside momentum after the company released its first-quarter results. The company reported revenue of $1.2 billion and adjusted earnings of $0.20 per share, missing analyst estimates on both earnings and revenue.

Shopify has also announced that it planned to acquire e-commerce fulfillment technology provider Deliverr. The transaction is valued at approximaterly $2.1 billion, including 80% in cash and 20% in Shopify Class A voting shares.

The earnings miss and the Deliverr acquisition have served as bearish catalysts for Shopify stock, which moved towards the $400 level. Back in November 2021, Shopify touched highs near $1763, so the stock has already lost more than 75% of its value.

What’s Next For Shopify Stock?

Analysts expect that Shopify will report earnings of $4.06 per share in the current year and $6.32 per share in the next year, so the stock is trading at 63 forward P/E, which is expensive.

Analysts estimates have been moving lower in recent months, and this trend will likely remain intact after the release of the first-quarter report.

The company remains expensive even after a huge pullback, and it remains to be seen whether speculative traders will be ready to buy the stock in the rising interest rate environment. Today, the yield of 30-year Treasuries moved towards 3.15%, a level that was last seen back in 2019.

Shopify’s current valuation is the reason why the market did not like the deal with Deliverr. Put simply, traders are moving out of growth stocks due to rising interest rates, so such a purchase from a high-PE company is viewed as a negative catalyst.

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

Strike Payments Platform Integrates Shopify and Bitcoin Payments

Key Insights:

  • Shopify merchants will be able to receive Bitcoin and cash out in USD.
  • Strike uses the Lightning Network, which enables faster, cheaper BTC transactions.
  • CEO Jack Mallers labeled credit cards “boomeristic” and said the payments system hadn’t been upgraded for 50 years.

The partnership announced on April 7 will enable Shopify merchants in the U.S. to receive Bitcoin payments from customers globally in U.S. dollars.

Strike CEO Jack Mallers said that the payments processing industry has been stagnant for 55 years, and it was time to revolutionize it. He added:

“The Lightning Network is a global payments network that lowers costs, enhances speed, drives innovation, improves financial inclusion, and brings the power of choice to consumers and merchants.”

The Lightning Network is a Bitcoin layer two scaling solution that enables faster and cheaper micro-payments across the network. In its native state, Bitcoin is too slow to be used for everyday payments as it can only process around seven transactions per second.  The Lightning Network can process thousands of transactions per second, making it ideal for Bitcoin [BTC] payments with apps such as Strike.

Big Deal For Merchants

The move is a big deal for Shopify [SHOP] merchants, who will be able to accept payments globally, save costs on processing fees, and get a settlement in cash. This would enable them to reach untapped markets and purchasing power.

There are 1.7 million businesses around the world that use Shopify, and it is the third-largest e-commerce platform in the U.S., with a 10.9% market share, according to reports. The firm was sued this month for its involvement in the Ledger hardware wallet data breach in 2020.

Speaking at the Bitcoin 2022 conference in Miami, Mallers said that the integration was already live, with merchants already accepting payments in BTC and cashing out in greenbacks.

He railed on the “boomeristic” credit card system and touted Bitcoin as the future of payments and settlements.

Strike has also integrated peer-to-peer Bitcoin payments using the Lightning Network. The company has partnered with alternative payments processor Blackhawk and point-of-sale provider NCR to facilitate these transactions.

Stablecoins on Lightning

Earlier this week, it was reported that Lightning Labs, a Bitcoin software developer, has secured a $70 million funding round.

This will enable the company to develop a system called Taro which will allow stablecoins to be sent and received on the Lightning Network.

The firm believes that the upgrade will boost Bitcoin adoption, potentially allowing the unbanked in developing countries to send money using stablecoins. It may also be used in the Strike Shopify collaboration, but that has yet to be confirmed.

Crypto Investors Sue TaskUs, Shopify, and Ledger Over New Data Breach

Key Insights:

  • TaskUs, Shopify, and Ledger face class-action suit over 2020 user data breach.
  • The latest breach led to the loss of crypto assets as illicit activity continues to grab the news headlines.
  • Regulatory scrutiny will intensify as negative news hits the crypto news wires.

Illicit activity has been on the rise since the start of the year, leading to the theft of Bitcoin (BTC) and other digital assets. Phishing and ransomware attacks have drawn plenty of attention.

With increased regulatory scrutiny and sanctions on Russia, scrutiny has intensified as crypto firms fail to curb the upward trend in cybercriminal attacks.

Hacks are not just limited to the crypto market but have extended to NFT marketplaces and even the Metaverse.

Shopify and Ledger Hit with Class Action Complaint over Data Breach

On Friday, crypto investors reportedly filed a class-action complaint against TaskUs, Shopify, and Ledger, a crypto hard wallet maker.

“The complaint seeks damages for the failure to exercise reasonable care in securing and safeguarding consumer information in connection with a massive 2020 data breach impacting Ledger SAS cryptocurrency hardware wallets.”

According to the complaint, the breach led to the release of about 272,000 pieces of personal data from Ledger and more than 1 million subscriber newsletters.

Shopify and TaskUs were reportedly aware of the data breach for more than a week before alerting customers to the latest hack.

Ledger sells Ledger wallets via its e-commerce website on Shopify. As a result of the data breach, cybercriminals targeted individuals with phishing attacks. The attacks led to the irreversible transfers of cryptocurrencies to cybercriminal accounts in the United States and overseas.

Illicit Activity Shows no Signs of Abating Despite Regulatory Scrutiny

Phishing attacks have been on the rise. There have been two major attacks in the last seven days alone.

ApeCoin’s value sank last week following a BAYC confirmation of a discord phishing attack that led to the theft of a Mutant Ape Yacht Club (MAYC) NFT.

Over the weekend, crypto hardware wallet firm Trezor issued a warning about a newsletter phishing attack targeting its users.

For Shopify and Ledger, the lawsuit returned the focus to a second data breach in 2021. Just weeks after the 2020 breach, Shopify leaked the personal data of another 20,000 Ledger customers.

With illicit activity rising, governments and regulators may look to force platforms to tighten their ships or face harsh penalties.

SEC’s Blind Eye to Shopify’s Stock Manipulation Highlights Its Double Standards

There’s no denying that the crypto market has matured greatly over the last couple of years. This is best illustrated by the growth in the industry’s capitalization from $250 billion to over $2.2 trillion since Q1 2020. On the heels of this meteoric growth, many experts had projected the market to be flooded with bitcoin exchange-traded funds (ETFs) by now.

However, contrary to these expectations, the last six months have seen the U.S. Securities and Exchange Commission (SEC) repeatedly reject several applications for spot bitcoin ETFs. In this regard, the regulatory body has refused applications submitted by many mainstream entities, including NYDIG, Fidelity, First Trust, VanEck, and WisdomTree.

The Rationale Offered by the SEC

According to the SEC, all applications submitted were incomplete. The regulator pointed out that the submissions fell short of the government’s requirements. The guidelines are meant to prevent fraudulent and manipulative practices needed to protect investors.

With the SEC having tightened its regulatory noose concerning the crypto industry, many analysts believe that a spot bitcoin ETF may not be on the horizon anytime soon. On the subject, Bloomberg Intelligence analyst Eric Balchunas was recently quoted as saying:

“The fact that the SEC is disapproving faster than they needed to — we were optimistic about [BTC] futures, but we’re not confident in a 2022 approval,”

SEC’s Double Standards on Full Display?

On March 18, a minute before the New York Stock Exchange closed for the day, the price of Shopify’s stock (SHOP) witnessed multiple price swings. To elaborate, the value of SHOP shot up by $100 per share to a staggering $780 before crashing once again. At the heart of the development lay Citadel Securities, a trading firm backed by billionaire Ken Griffin, which sold the shares before the closing bell.

SHOP price
Price fluctuation of SHOP: NYSE

Despite Citadel Securities not being a licensed broker — but rather a designated market maker — the deal was allowed to be executed. This has led many pundits to question the legitimacy of the SEC’s motives since the regulator has taken an iron fist approach when it comes to the crypto industry. However, it has repeatedly turned a blind eye towards the misgivings of firms operating within the trad-fi sector.

Frustration Grows

Constant rejections by the SEC have resulted in Grayscale, the world’s largest digital currency asset manager, potentially pursuing legal action against the regulatory body.

During a recent interview, CEO Michael Sonnenshein expressed displeasure with the SEC. He noted that despite having amended his firm’s offering as per the regulator’s norms, the government agency still refuses to greenlight its proposed ETF.

Shares of Canadia’s Shopify Slump After It Warns of Revenue Slowdown

Shares of Canadian e-commerce Shopify fell over 18% on Wednesday after the company warned that revenue growth is expected to slow in the first half due to the cooling of the e-commerce boom witnessed during the pandemic.

The e-commerce software company reported quarterly adjusted earnings of $1.36​​ per share, beating the Wall Street consensus estimates of $1.24 per share. The company said its revenue jumped more than 40% to $1.38 billion from a year earlier. That too beat the market expectations of $1.33 billion.

“While we believe that the COVID-triggered acceleration of e-commerce that spilled into the first half of 2021 in the form of lockdowns and government stimulus will be absent from 2022, and there is caution around inflation and consumer spend near term, for the full year, we see economic growth supporting the continued penetration of retail by e-commerce,” the company said in the press release.

The company anticipates revenue growth for the full year 2022 that is lower than the 57% revenue growth achieved in 2021.

The U.S. listed Shopify stock slumped over 18% to $731.54 on Wednesday. The stock fell over 46% so far this year after surging over 21 in 2021.

Analyst Comments

“We see Shopify continuing to expand and capitalizing on the attractive eCommerce tailwinds, and highlight a $25B+ ‘serviceable’ opportunity for the company driven by international expansion, continued Payments penetration, and growth within Shopify Fulfillment Network,” noted Keith Weiss, Equity Analyst at Morgan Stanley.

“A key beneficiary of the pandemic-driven shift to e-commerce, investor debate now shifts to the durability of GMV growth and levers to expand take rate. With an expanding solution portfolio and recent pullback, SHOP looks attractive, but the lack of metrics makes conviction difficult.”

Shopify Stock Price Forecast

Twenty-three analysts who offered stock ratings for Shopify in the last three months forecast the average price in 12 months of $1,403.58 with a high forecast of $2,000.00 and a low forecast of $900.00.

The average price target represents a 92.80% change from the last price of $728.00. Of those 23 analysts, 13 rated “Buy”, 10 rated “Hold”, while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $1,150 with a high of $2,500 under a bull scenario and $500 under the worst-case scenario. The investment bank gave an “Equal-weight” rating on the e-commerce company’s stock.

Several analysts have also updated their stock outlook. CIBC cut the target price to $950 from $1750. Citigroup lowered the price target to $978 from $1570. RBC slashed the price objective to $1450 from $1800.

Technical analysis suggests it is good to sell as 100-day Moving Average and 100-200-day MACD Oscillator shows a strong selling opportunity.

Check out FX Empire’s earnings calendar

What Moves the Stock Market This Week?

A new 40-year high read on consumer inflation last week now has Wall Street thinking the Fed might be even more aggressive with rate hikes. At the same time, investors continue to closely monitor the geopolitical headlines involving Russia and Ukraine. From what I’ve heard, there were a lot of diplomatic phone calls over the weekend, including one between Biden and Putin, but nothing seems to have changed in regard to Putin’s “poker face”.

Political tensions

Some military insiders continue to warn that Russia could now invade Ukraine at a moment’s notice. Some are saying it happens this week while others say Russia will invade after the Winter Olympics.

To add even more worry and concern, several geopolitical groups are thinking Russia and China are somewhat collaborating on strategy. This isn’t really anything new but the “buzz” and rumors are starting to get louder.

The big what if… what if Russia was to make a move on Ukraine and China a move on Taiwan in a coordinated effort? I don’t really think that happens but there’s always a possibility. Perhaps a more worrisome theory is Russia and China working together on economic warfare strategies to knock the US dollar out of its leadership role as the world’s currency.

Russia has a good hold on energy supply and China is the world’s biggest influence on the global supply chain. If Russia can withhold energy and China slows the supply chain, theoretically they could create a major wave of inflation. If at the same time, they continued to dump US Treasuries in a big way they could weaken the US dollar enough to bring into question its role as the world’s reserve currency, especially with our debt level so elevated.

The theory continues… if the US dollar was to weaken enough some exporting countries and global businesses might start to question the value of their goods being sold at a discount when the transaction is settled in US dollars.

Hence more longer-term economic concern.

Interest rate hikes

More large Wall Street insiders are talking about perhaps +5 to +7 Fed rate hikes ahead in order to slow domestic inflation. The big questions remain… how fast will the Fed shrink its balance sheet and how long before they will stop raising interest rates? St. Louis Fed President Bullard last week expressed support for a 50-basis points hike, though several other Fed officials have since argued against the idea.

Fed speculation has also brought increased volatility to bond markets with yield on the 10-Treasury topping 2% on Thursday but ending Friday a full 10-basis points lower. The 2-year yield saw its biggest one-day move since 2009, surging 26 basis points at one point on Thursday. Those are pretty dramatic swings for bond markets and highlights the extreme level of uncertainty that is plaguing financial markets.

Just keep in mind however, from the summer of 2016 to the fall of 2018, 10-year Treasury yields jumped from 1.4% to over +3.0% yet the NASDAQ was still able to increase by over +45%.

On the energy front, there continues to be talk of tighter global oil supply and higher prices ahead especially if we see military action between Russia and Ukraine. Remember, increased energy costs can quickly spread through an entire economy as manufacturers pass along higher production and transportation costs in the form of higher consumer prices. Consumers also get dinged at the gas pump as well as with higher heating and cooling costs.

With inflation already smoking hot at +7.6% and Consumer sentiment starting to waiver the market is starting to get more nervous about higher energy costs. Worsening consumer sentiment can be an early warning signal of a decline in consumer spending. However, bulls still largely expect a boost in consumer spending as the Omicron Covid wave continues to fade, pointing to the massive amount of savings and increased asset values that consumers have accumulated over the past couple of years.

Most believe that spending will shift more toward “services” and away from goods, which in turn is expected to help further ease some of the strain on supply chains and start to cool prices. Supply chains have shown slow but steady improvements, especially in the last couple of weeks as Covid cases have plunged, which most economists think will should start slowing the rate of monthly inflation gains.

By March, inflation reads will be up against much higher year-ago data which should also help to bring down the rate of monthly increases, at least in theory. And if inflation starts showing signs of coming down on its own, that would likely decrease pressures on the Federal Reserve to resort to more aggressive tactics to tame inflation.

There is no major economic data today but investors are anxious about the Producer Price Index for January due out tomorrow. The bigger economic headlines this week include inflationary data out of China and US retail sales on Wednesday morning.

The Fed FOMC minutes are also being released Wednesday afternoon. The earnings this week include Airbnb and Roblox on Tuesday; Cisco, Nvidia, and Shopify on Wednesday; Palantir and Walmart on Thursday; and Draft kings and John Deere on Friday.

Wall Street Week Ahead Earnings: Shopify, Baidu, Walmart, Deere and DraftKings in Focus

Investors will focus on December quarter earnings for stocks that are economically sensitive, which should show better profits than technology stocks. Increasing Treasury yields and risk aversion could hit the stock market hard over the coming months. In addition, investors will closely monitor the latest news on the rapidly spread Omicron coronavirus variant to see how it impacts earnings in 2022.

Earnings Calendar For The Week Of February 14

Monday (February 14)

TICKER COMPANY EPS FORECAST
AAP Advance Auto Parts $1.93
ALX Alexander’s $4.29
AMKR Amkor Technology $0.65
ANET Arista Networks $0.6
SRC Spirit Realty Capital $0.81
VNO Vornado Realty Trust $0.76
WEBR Weber $-0.02

Tuesday (February 15)

TICKER COMPANY EPS FORECAST
ABNB Airbnb $0.05
AKAM Akamai Technologies $1.14
DVN Devon Energy $1.24
MAR Marriott International $1.04
RPRX Royalty Pharma $0.79
VIAC ViacomCBS $0.37
WFG West Fraser Timber $3.51

 

Wednesday (February 16)

IN THE SPOTLIGHT: SHOPIFY, BAIDU

SHOPIFY: Canadian multinational e-commerce company is expected to report its fourth-quarter earnings of $0.62 per share, which represents a year-over-year decline of over 46% from $1.15 per share seen in the same period a year ago. But the e-commerce software company would post revenue growth of over 37% to $1.34 billion.

According to Barron’s report, Gary Robinson, investment manager at Baillie Gifford said that Shopify is miles ahead of its competitors in helping merchants all over the world sell their items. He added that the company’s revenue could rise sharply in the next five years.

BAIDU: The Chinese tech giant is expected to report its fourth-quarter earnings of $1.89 per share, which represents a year-over-year decline of nearly 40% from $3.08 per share seen in the same period a year ago.

However, Baidu Inc, a leader in the Chinese search industry in terms of user market share, would post revenue growth of about 9% to $5.04 billion. The company has beaten consensus earnings estimates in most of the quarters in the last two years, at least.

“We maintain a “Buy” rating for Baidu (BIDU) with a target price of RMB 165. Our target price is based on the forward P/E of 18.48x and forward P/S of 0.42x for FY22. Non-GAAP EPS of RMB 56.59 ($8.98) for FY22. This provides an upside potential of 15% over the CMP of RMB 143.80,” noted Shejal Ajmera is founder and head of research at CrispIdea.

“We decrease our estimate for revenue growth to 14.3% from 19% for FY21 due to China’s low GDP growth. We estimate revenue growth of 10% for FY22 and 12% for FY23. We estimate EPS of RMB 56.19 ($8.87) and RMB 56.59 ($8.93) for FY21 and FY22, respectively.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE FEBRUARY 16

TICKER COMPANY EPS FORECAST
AMAT Applied Materials $1.85
SAM Boston Beer $2.87
H Hyatt Hotels $-0.08
MGY Magnolia Oil & Gas $0.77
MRO Marathon Oil $0.52
NVDA Nvidia $1.0
TRIP TripAdvisor $-0.04

 

Thursday (February 17)

IN THE SPOTLIGHT: WALMART

Bentonville, Arkansas-based retailer Walmart is expected to report its fourth-quarter earnings of $1.49 per share, which represents year-over-year growth of over 7% from $1.39 per share seen in the same period a year ago.

The multinational retail corporation that operates a chain of hypermarkets would post revenue growth of nearly 1% to $150.91 billion. The company has beaten consensus earnings estimates in most of the quarters in the last two years, at least.

“Latest AlphaWise data shows Walmart+ membership continues to increase, with ~15m members total (~12% household penetration) & ~1m net members added in the past quarter. Overlap between Walmart+ & Prime remains high; we’ll monitor if this changes with a Prime fee hike coming,” noted Simeon Gutman, equity analyst at Morgan Stanley.

“We expect Walmart (WMT) to sustain recent momentum in its core business in F’22/F’23 and see a growing ability to balance longer-term investments with near-term returns. Our OW rating and $170 PT are underpinned by a preference for 1) quality players with scale and 2) defensive retailers as the market undergoes a mid-cycle transition.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE FEBRUARY 17

TICKER COMPANY EPS FORECAST
AN AutoNation $4.96
DBX Dropbox $0.2
ROKU Roku $0.01

 

Friday (February 18)

IN THE SPOTLIGHT: DEERE, DRAFTKINGS

DEERE: The world’s largest maker of farm equipment, is expected to report its fiscal first-quarter earnings of $2.28 per share, which represents a year-over-year decline of over 41% from $3.87 per share seen in the same period a year ago. The agricultural, construction and forestry equipment manufacturer would post revenue growth of about 0.5% to $8.09 billion.

“Higher input and freight costs to affect FY22 margins. We downgrade our rating to “Hold” from “Buy” for Deere & Co. and upgrade our TP to $406 for FY23. We derive TP based on non-GAAP EPS to $22.30 & $25.14 for FY22 & FY23, respectively and P/E of ~16.1x for FY23. This provides an upside potential of 8.6% from CMP of $373.79,” noted Shejal Ajmera, Head of Research at Crispidea.

“Following are the reasons for the above assumptions: 1) Strong demand in farm and construction equipment to aid topline; 2) Focus on automation to ensure long term growth and 3) Short term headwinds to affect profitability.”

DRAFTKINGS: The U.S.-focused gambling operator is expected to report its fourth-quarter loss of $0.78 per share, a dime greater than the loss of $0.68 it recorded in the same period a year ago. But the revenue would grow more than 36% to $439.5 million.

“We forecast legal US sports betting & iGaming to increase from <$1.5B in 2019 to $20.6B in 2025 as more states legalize and spend per capita rises. Forecast DKNG to maintain top tier share, 24% in OSB and 21% in iGaming in 2025. Investors question LT profits, but other developed markets have shown 25-30%+ profits for operators at maturity, esp. those with a customer acq. advantage similar to DKNG’s with its DFS database,” noted Thomas Allen, equity analyst at Morgan Stanley.

“Current valuation of 9x 2025e EBITDA does not reflect long-term margins or growth. Upside drivers include signs of profits in mature states, new product innovation and higher market share. Downside risks include higher losses, greater competition and lagging product innovation.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE FEBRUARY 18

TICKER COMPANY EPS FORECAST
ABR Arbor Realty Trust $0.39
B Barnes Group $0.49
BLMN Bloomin’ Brands $0.52
DE Deere & Co. $2.28

 

Coinbase Welcomes Former Netflix Employee Brian Rocha

As crypto adoption increases, many people are tempted to join the crypto business because of its mainstreaming and non-stop growth. Who knows if joining a big crypto firm now is like joining Google or Amazon in the 90s?

Brian Rocha, a veteran employee that comes from the entertainment and media business, has recently joined Coinbase as the new Head of Content Strategy, according to his following Linkedin post comment:

“I’m excited to share that today I will be joining Coinbase! After having spent the past 15 years working with both legacy and new media and entertainment companies, I’m excited to take on a new opportunity building content strategy for the #crypto, #blockchain, and #web3 world”

About Brian Rocha

Brian Rocha has been working for media and entertainment companies during his professional career. Netflix was his most recent experience before joining Coinbase, where he worked nearly five and a half years as a Content Strategy & Analysis manager and director.

He studied Economics at UCLA. Graduated in 2009 while he was working as a financial analyst at The Walt Disney Company.

After The Walt Disney Company, he joined Warner Bros. Entertainment Group of Companies to work as an International Digital Development Manager until he joined Netflix.

The Crypto Industry Continues To Grow With Coinbase

Brian Rocha isn’t the only one who has recently joined the Coinbase team. The CEO and founder of Shopify, Tobias Lütke joined earlier this week Coinbase’s Board of Directors.

Tobias Lütke commented:

 “The concepts of decentralized finance and entrepreneurship exemplify the promise of Web3 where opportunity exists for the many, not the few,”

Last month, Coinbase partnered with Mastercard so the users could buy NFTs with credit and debit cards in their upcoming NFT marketplace platform.

Coinbase became a publicly-traded company in April 2021, marking a major milestone. Also last year, Shalin Pei, a former Facebook Senior Product Manager joined Coinbase in September 2021.

As crypto becomes more popular, there is no doubt more Web2 employees will follow Brian Rocha’s path.

Best Oversold Stocks to Buy for February 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 look like over the last year (clearly the selling is deepening):

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: SHOP, TSLA, NFLX, NVDA & FB.

Up first is Shopify, Inc. (SHOP), the e-commerce platform.

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

  • 1-month performance (-41.8%)
  • Recent Big Money sell signals

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

Clearly, that’s a lot of red, especially in January.

Looking more broadly, Shopify has been a high-quality stock for years. The blue bars in the chart below show when SHOP 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 SHOP did in 2019 and 2020, it can be very bullish:

Source: www.MAPsignals.com

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

  • 1-year EBITDA growth rate (+4.1%)
  • 1-year sales growth rate (+85.6%)

Next up is Tesla Inc. (TSLA), the electric vehicle maker.

Check out these technicals for TSLA:

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

It’s been getting hammered recently:

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

Source: www.MAPsignals.com

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

  • 1-year EBITDA growth rate = (+30.7%)
  • 1-year sales growth rate = (+28.3%)

Another growth name is Netflix (NFLX), the streaming entertainment service.

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

  • 1 month performance (-36.9%)
  • Historical Big Money signals

Below are the blue Big Money signals NFLX has made since 2016. That’s the JUICE!

Source: www.MAPsignals.com

Now let’s dig deeper. Netflix’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 = (+25.3%)
  • 1-year sales growth rate = (+18.8%)

Number four on the list is NVIDIA Corporation (NVDA), which is a dominant semiconductor company.

Here are the technicals important to me:

  • 1 month performance (-29.1%)
  • Historical Big Money signals

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

But NVIDIA has been a Big Money darling for a while. Below are the Big Money buy signals for NVDA since 2016:

Source: www.MAPsignals.com

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

  • 1-year EBITDA growth rate = (+19.7%)
  • 1-year sales growth rate = (+52.7%)

Our last growth candidate is Meta Platforms, Inc. (FB), formerly Facebook, the social media giant. From September 2021 on, Big Money buying has given way to steep declines:

Check out these technicals:

  • 1-month performance (-14.9%)
  • Historical Big Money signals

Meta 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 decently, and there’s been sizeable sales growth:

  • 1-year EBITDA growth rate = (+3.3%)
  • 1-year sales growth rate = (+21.6%)

The Bottom Line

SHOP, TSLA, NFLX, NVDA & FB represent the top oversold stocks for February 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 TSLA & NFLX in personal accounts and NFLX in managed accounts.

Investment Research Disclaimer

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One Chart Reveals The Sector Rotation In The Stock Market

In case you are still wondering what’s happening in the stock market since November 2021, the chart below will give you a clear picture.

Based on the ratio chart IVW/IVE where IVW is S&P 500 Growth ETF and IVE is S&P 500 Value ETF, it can be observed that the price peaked in mid of November 2021 followed by a lower high and lower low and had a sharp selloff in the first week of January in 2022.

As shown the price action of the above chart, the growth stocks started to underperform the value stocks in December 2021 (since it formed a lower high and a lower low) and the scenario is getting worse as reflected in the selloff last week.

Another thing to pay attention to is the increasing of the volume during the correction as this suggested urgent selling by the institutional investors. Nuances of the price and volume are to be studied via volume spread analysis in order to detect the subtle difference between institutional selling versus a normal pullback.

Effect of Fed’s Tapering to the Stock Market

This is In line with the Federal Reserve’s announcement of reducing the monthly bond buying program back in November 2021 because lots of leading growth stocks like Sea (SE), Shopify (SHOP), Upstart (UPST), Zscaler (ZS), Bill.com (BILL) started a steep correction since mid of November 2021.

There are tell-tale signs behind the sharp decline of the growth stocks, which you can refer to the post on the deterioration of the stock market breadth to find out how to judge the overall health in the stock market.

As the growth stocks are very sensitive and vulnerable to credit tightening environment, it is not surprised to see them kick start the correction especially given their rich valuation in 2021.

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Sector Rotation to Energy, Finance and Consumer Sectors

While the sector rotation is on-going with the growth stocks being abandoned, cyclical and defensive sectors like Energy (XLE), Finance (XLF) and Consumer (XLP) are breaking all-time high, as shown in the chart below:

Consumer staple (XLP) sector is traditionally a defensive sector. So, it is not surprised to have money flows in upon a market correction or a technology sector selloff. The cyclical sectors like the energy and finance are bucking the trend of the market thanks to the Santa Claus rally in crude oil and the expectation of rising interest rate macro environment, with at least 2-3 rate hikes coming in 2022 as guided by Fed.

S&P 500 Price Prediction

S&P 500 futures (ES) broke below the critical support at 4710 on 5 Jan 2022 and subsequently it failed to rally back above, which is a bearish sign for more weakness ahead. Should S&P 500 break below 4660, lower price targets at 4600 and 4500 could be expected. Refer to the chart below:

Since S&P 500 is vulnerable for a correction, if you are keen for a long trade, it is essential to carefully select the stocks within these outperforming sectors (XLP, XLE, XLF) with the best entry setup and high reward to risk ratio. Stop loss is essential for trading in case the trade setup fail due to the market weakness. Else shorting weak stocks like those in the ARKK ETF could be a better choice.

Top Stocks To Invest in for 2022

They’re the outliers of the market. These types of stocks have three 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 first, the five stocks we see as top long-term candidates for 2022 are SHOP, ALGN, LOW, PYPL, & F.

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 integrated commerce and marketing platform.

Great companies on pullbacks are worthy of attention. Check out SHOP:

  • 1-month performance (-15.00%)
  • 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, I call it the stairway to heaven:

Source: www.MAPsignals.com

But, what about fundamentals? As you can see, Shopify’s revenue numbers have been strong while earnings have lagged, though I expect earnings to improve in the years ahead:

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

Next up is Align Technology, Inc. (ALGN), which is a medical device company (the makers of Invisalign teeth aligners).

Check out these technicals for ALGN:

  • 1-month performance (-3.20%)
  • Historical Big Money signals

There’s been a price dip, but let’s look long-term. These are the top buy signals Align Technology has made since 2015. Clearly the Big Money has been consistent for years:

Source: www.MAPsignals.com

Let’s look at fundamentals. As you can see, Align Technology has had huge growth. I see that continuing in the years ahead:

  • 3-year sales growth rate = (+19.52%)
  • 3-year earnings growth rate = (+87.95%)

Another name for 2022 is Lowe’s Companies, Inc. (LOW), the popular home improvement chain.

Strong candidates for growth usually have Big Money buying the shares. Lowe’s has that. Also, the stock has been ramping up lately:

  • 1-month performance (+3.20%)
  • Historical Big Money signals

Below are the Big Money signals Lowe’s has made since 2010. That’s JUICE!

Source: www.MAPsignals.com

Now let’s look a bit closer. The growth is impressive, and I expect more of the same in the future:

  • 3-year sales growth rate = (+9.8%)
  • 3-year earnings growth rate = (+34.7%)

Number four on the list is payment processor PayPal Holdings Inc. (PYPL). It’s been on a sell streak lately, but I think this is an opportunity and an attractive entry point for long-term investors.

Here are the technicals important to me:

  • 1-month performance (+2.56%)
  • Historical Big Money signals

Below are the Big Money signals for PYPL since 2015:

Source: www.MAPsignals.com

Let’s look under the hood. Despite recent price volatility, the fundamentals indicate PayPal has been growing nicely:

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

Our last 2022 candidate is automotive giant Ford Motor Company (F). It was a Big Money favorite in the 1990s and seems to be making a comeback. Consider this a turnaround play based on Ford’s electric vehicle present and future.

Check out these technicals:

  • 1-month performance (+27.50%)
  • Historical Big Money signals

Ford is a high-quality stock and has several Big Money buys (green bars) in the last year:

Source: www.MAPsignals.com

Now look at the fundamentals. Sales and earnings haven’t been great. But I expect that to change going forward as the company’s product shift unfolds in the market:

  • 3-year sales growth rate = (-6.31%)
  • 3-year earnings growth rate = (-992.66%)

The Bottom Line

SHOP, ALGN, LOW, PYPL, & F represent top stocks for 2022. Strong fundamentals, future prospects, 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 F & PYPL in personal accounts and long positions in PYPL in managed accounts.

Investment Research Disclaimer

https://mapsignals.com/contact/

 

Shopify now Supports NFT Trading and Minting

Shopify has taken a step further in its crypto adventure, as an announcement from the popular e-commerce and payment service company indicated that its platform is now NFT-enabled. Users can now mint and trade collectibles on the platform.

Users can Mint Their NFTs

The company’s CEO, Tobias Lütke, shared this in a tweet announcement.

Available information shows that GigLabs NFT played a pivotal role in making this service available, as Shopify partnered with the company to tap from its NFT technological tool based on the Flow blockchain. NFT-based on other blockchain networks such Ethereum, Polygon, and others can be minted by teaming with its partner apps.

In the comment of Shopify’s Product Director, Robleh Jama, “Our growing NFT app ecosystem demonstrates our commitment to offering merchants an accessible approach to selling digital assets directly through their Shopify stores.”

Among payment methods available for NFT fans that may want to purchase the collectibles include Shopify Payments and Shop Pay. The platform also accepts payments using crypto, credit, or debit cards. After the purchase, users will receive the NFT through an email to easily add the NFT to their digital wallets directly.

Shopify U.S Users to be the First to Enjoy the Service

According to information on its website, this NFT service is currently available for its U.S-based users, especially the Shopify Plus merchants. Interested customers who want to add this service to their Shopify Plus accounts must contact the partnered NFT firm, GigLabs NFT, for necessary information.

Per a brief, BreakingT and Infinite Objects would be among the firms to first utilize the application’s service on the platform. “The firms intend to develop a new source of income and deepen customer loyalty. Both brands worked closely with GigLabs to design and create the application.” 

This is not the first step of Shopify in its long crypto journey. Its journey can be traced to 2020, when it started accepting Bitcoin through the partnership with BTCPay. It also offered an open-source service with support to integrate multiple functions in stores that use Shopify.

Why Shopify Stock Is Up By 3% Today

Shopify Stock Gains Ground After Company Reports Record Black Friday Weekend Sales

Shopify stock gained upside momentum after the company reported that Black Friday/ Cyber Monday weekend sales totaled $6.3 billion globally. Back in 2020, sales during this weekend totaled $5.1 billion, so Shopify merchants were able to boost sales by 23%. On average, consumers spent $100.70 per order. Top sales were from London, New York and Los Angeles.

Shopify stock has performed well this year, gaining more than 40% year-to-date. It has recently faced resistance at all-time high levels near $1750 but found support near the $1500 level and rebounded towards $1600 as traders bet that problems with coronavirus would boost online sales.

What’s Next For Shopify Stock?

Analyst estimates have been moving higher in recent weeks. Currently, analysts expect that Shopify will report earnings of $8.16 per share in 2021 and $8.9 per share in 2022, so the stock is trading at 180 forward P/E.

The market looks ready to tolerate high valuation levels as the company continues to grow at a fast pace. However, it remains to be seen whether analyst estimates will continue to move higher at a fast pace even after the record Black Friday weekend.

While traders managed to ignore concerns about the company’s valuation, it is not clear if they will be ready to support the stock in case the broader market remains under pressure amid virus worries.

Recent trading action in former champions like Zoom and Peloton suggests that market is not ready to bet that all previous trends will remain intact in case the world faces a new wave of coronavirus.

In this light, Shopify stock comes with a risk of multiple compression, which can put material pressure on the company’s shares. At the same time, the company’s fundamental story remains strong, so the stock may return to recent highs in case the general market mood calms down.

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

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:

Chart, histogram

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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:

Chart, histogram

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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!

Chart, histogram

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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:

Chart, histogram

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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:

Chart, histogram

Description automatically generated

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/

 

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

It’s The Risk-On Market Sentiment Taking Gold Fractionally Lower

Currently, the dollar is down 0.17% and fixed at 91.77. The 10-year note also declined from the highs witnessed last week and is currently fixed at 1.679%. Bitcoin futures are currently trading down by 5.13% and fixed at $55,910. It seems that the dollar, Bitcoin, and 10-year notes, which have been the primary reasons that the precious metals downside pressure, have subsided at least for the moment.

Rather it seems to be portfolio balancing as market participants moved back into the tech-heavy NASDAQ composite with specific companies rebounding after trading under pressure for the last two weeks. The NASDAQ composite showed gains head and shoulders above the S&P 500 as well as the Dow, gaining 1.26% in trading today. The composite index is currently at 13,374.94, up approximately 160 points.

Tesla, for example, is currently up to $22.84 and fixed at $677.50 per share. Amazon is up to $44 and is currently fixed at $3119. Shopify is up to $35.72 and fixed at $1156.98, And Nvidia is up to $13.28 and fixed at $526.94.

Another reason cited for today’s decline in precious metals was Turkey. Both their currency and equities markets tumbled after President Erdogan fired the head of their central bank. MarketWatch reported that “Turkey’s currency and stocks collapsed after the abrupt termination of its central bank head, a move that led investors to take a cautious stance toward risky assets on Monday.”

gold 2 march 22

In an article penned by Steve Goldstein, he quoted Phoenix Kalen, a strategist at the French bank Societe Generale, “With Naci Agbal’s removal from the CBRT, Turkey loses one of its last remaining anchors of institutional credibility. During his short tenure, Agbal had succeeded where various predecessors had not – in cultivating trust in the central bank’s inflation-targeting framework, in restoring monetary policy independence, in encouraging international investors to re-engage with the crisis-prone Turkish narrative, in driving an 18.0% rally in the lira against the dollar, and most crucially – in arresting and even reversing the damaging trend of dollarization in the economy.”

gold march 22

Market sentiment shifting towards equities and the issues reported in Turkey have been the primary causes taking gold fractionally lower, with the most active April 2021 Comex contract down $2.90 and fixed at $1738.80. However, silver is experiencing a much sharper decline, currently down 1.77%, taking the most active May 2021 Comex contract to $25.85 an ounce, after factoring in today’s decline of $0.47.

silver march 22

Government spending has already allocated four trillion last year, in addition to the most recent aid package costing $1.9 trillion. Now the Biden administration is considering adding an additional $3 trillion worth of debt as it looks at two additional recovery packages. The $3 trillion would be spent to improve infrastructure, climate change, and reducing economic inequities, according to the New York Times. CNBC reported that “The White House is going to propose splitting the mammoth initiative into two bills, though Republican support for either plank could be hard to secure as Biden aims to increase taxes on corporations and the wealthiest Americans.”

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Wishing you, as always, good trading and good health,

Gary S. Wagner

Shopify Sharply Lower Despite Blowout Quarter

Shopify Inc. (SHOP) is trading lower by more than 7% in the first hour of Wednesday’s U.S. session despite beating Q4 2020 top and bottom line estimates. The e-commerce juggernaut earned $1.58 per-share during the quarter, $0.37 better-than expected, while revenue surged an astounding 93.6% year-over-year to $977.7 million, more than $60 million above consensus. The stock gained more than 30% in the weeks heading into the report, lifting to another all-time high.

Incredible Growth Curve

The rapid shift into online sales as a result of the pandemic underpinned subscription solutions revenue gains of 53% year-over-year while merchant solution revenue grew 117%. No specific guidance was offered but the company expects ‘rapid revenue growth’ to continue in 2021. The Q4 revenue surge matched spectacular results reported in Q2 and Q3, highlighting rapid business momentum that is showing no signs of slowing down.

Shopify expanded its payment systems to Facebook Inc. (FB) and Instagram last week, marking another expansion of its rapidly growing footprint.  As the company noted “we’re expanding Shop Pay, the fastest and most secure way to shop online, to all Shopify merchants selling on Facebook and Instagram. With Shop Pay now available as a fast and secure payment option on Facebook, people also get access to industry-leading order tracking and carbon offsets from their deliveries.”

Wall Street and Technical Outlook

Wall Street consensus has grown more cautious due to historic share gains, with an ‘Overweight’ rating based upon 10 ‘Buy’, 2 ‘Overweight’, 12 ‘Hold’, and 2 ‘Sell’ recommendations. Price targets currently range from a low of $600 to a Street-high $1,810 while the stock is now trading about $100 above the median $1,270 target. The sell-the-news reaction could settle around the median price before committed buyers return in force.

The stock rallied above the February 2020 high at 594 in April and took off in a momentum-fueled advance, finally stalling near 1,150 at the start of September. Positive price action cleared resistance in December, yielding a 6-week support test, followed by a vertical buying wave that added more than 400 points into the news.  It’s not particularly overbought due to the three-month trading rnage and this selling wave is unlikely to mark a major trend change.

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

Disclosure: the author held no positions in aforementioned securities at the time of publication.