Fundamental and Technical Analysis at Odds for...

Rick Pendergraft

published in Blogs

Dec 03, 2020

Fundamental and Technical Analysis at Odds for Trio of Software Stocks ahead of Earnings

The software industry has been one of the top performers over the past few years. The industry as a whole has seen good earnings and revenue growth, and that has translated to the stocks in the industry doing well. The iShares Expanded Tech-Software Sector ETF (IGV) has gained over 80% in the last two years while the S&P 500 is up a far more modest 31%.

There are three companies in the packaged software arena that are set to release earnings over the next week and two of those three have experienced extremely strong moves. DocuSign (DOCU) and Cloudera (CLDR) are set to report earnings on December 4, and Coupa Software (COUP) is set to report on December 7.

Over the past two years, DocuSign and Coupa have both gained over 400% while Cloudera has lost 8.2%. The gains for the two, as impressive as they have been, highlight how the stocks have performed well despite the fundamentals not being as strong as the technical picture.

Looking at the Tickeron Fundamental Screener, each of the three companies only has one area where it gets a positive reading. Coupa and DocuSign both get positive ratings for their Outlook Rating while Cloudera gets a positive rating for its Valuation Rating. After that, it is primarily negative readings for the companies.

Two areas in particular where the companies score poorly are the Profit vs. Risk Ratings and the P/E Growth Ratings. All three companies get a reading of 100 in both categories and that is the worst score a company can get. Coupa and DocuSign both get poor ratings in the Valuation Ratings and their SMR ratings as well. The only area where all three companies get neutral ratings is in the Price Growth Ratings.

The technical picture for the stocks is considerably better. DocuSign has four bullish signals and two bearish signals while Coupa has five bullish signals and only one bearish signal. Cloudera’s numbers aren’t as good, but they are still strong with four bullish signals and three bearish signals. All three stocks have received bullish signals from the MACD and Momentum indicators within the last few weeks. Coupa and Cloudera had bullish signals generated from the AROON indicator on December 2.

As for the scorecard grades from Tickeron, Coupa is considered a “strong buy” at this time while DocuSign and Cloudera are considered “buys”. Looking at how Wall Street analysts and short sellers view these three stocks, DocuSign has pretty average sentiment while Cloudera and Coupa are both receiving a more pessimism directed at them than the average stock.

There are 19 analysts following DocuSign with 13 “buy” ratings, five “hold” ratings, and one “sell” rating. That puts the buy percentage at 68.4% and that is in the average range. Coupa has 26 analysts following it with 13 “buy” ratings, 10 “hold” ratings, and three “sell” ratings. This gives them a buy percentage of 50% and that is below average. Cloudera is the least liked one as far as the analysts are concerned. Out of 15 ratings, there are four “buys” and 11 “holds”, making the buy percentage 26.7% and that is far below average.

As for the short interest ratios, Coupa’s ratio is 5.35 and that is well above average and a sign of pessimism. Cloudera’s short interest ratio is 4.3 and that is slightly above the average ratio in the 3.0 range. DocuSign’s ratio is at 2.02 presently. The ratio did drop in the first part of November, but that was due to a big jump in the average daily trading volume. The short interest for DocuSign actually rose to 9.11 million shares from 8.45 million shares during the period.

Here’s how the companies compare to one another and how they compare to other companies in general from the standpoint of the fundamental ratings and the technical indicators.

Related Tickers: DOCU

Sergey Savastiouk

published in Blogs

Mar 07, 2021

4 Tricks Hedge Funds Use to Get Ahead

If the stock market were Major League Baseball, hedge funds and institutional investors would be the pros on championship teams while everyday self-directed investors (SDIs) are the benchwarmers in the minors.It’s how they get ahead, and it’s why 90% of SDIs lose money trying to play (invest and trade) in the major leagues. The 4 tricks we discuss below are rooted in one common theme: they all use Artificial Intelligence and algorithms to generate data and ideas.

John Jacques

published in Blogs

Mar 22, 2018

A.I. Stock Market Predictions: Head & Shoulders

Statistics for the Head-and-Shoulders Bottom Pattern The days where only hedge funds used algorithms to trade stocks are officially over. Now retail investors can use Artificial Intelligence (A.I. Here’s an example of the algorithm in action: Late last year, Tickeron’s A.I.

Sergey Savastiouk

published in Blogs

Jul 10, 2020

3 Stocks to Buy if Coronavirus Second Wave Hits

By analyzing market trends from the first wave, you can predict behavior for the second. Technology stocks have performed at historic levels this year, but the market is severely overbought.To compensate for that, look at performance during Q1 and Q2, the height of global Covid shutdowns.

Edward Flores

published in Blogs

Feb 06, 2021

How to Become the Millionaire Next Door

The Golden Gate Bridge is always a fixture of these walks too, one of man's most beautiful creations. As we were walking, at one point she turned to me and said, "Man, I'll never have a million dollars."" My girlfriend is 27 years old and works as a graphic designer, making about $75,000 a year.

Alla Petriaieva

published in Blogs

Feb 23, 2021

Is Ethereum’s Bomb about to Explode?

Ethereum’s software is set for an update in October.Until it is finished, participants in the Ethereum blockchain must determine how to delay the difficulty bomb – code that necessitates a steadily increasing amount of computer power to mine blocks and unlock rewards – that is already in place.

Sergey Savastiouk

published in Blogs

Aug 07, 2018

When Is the Next Recession Coming?

However, we also know that economists predicted 22 recessions out of 11 that took place since 1945. Are there real recession signs we should watch for?Indeed, the answer is yes, and here are a few very important ones: The first one is almost obvious and known to everyone – it is the Fed.

Abhoy Sarkar

published in Blogs

May 22, 2020

Central banks have been buying $2.4 billion in assets every hour for the past two months

Some $17.8 billion has been poured into bond markets over the past week, the biggest move in more than three months.Around $3.5 billion has been invested into gold, the second largest on record.

Rick Pendergraft

published in Blogs

Feb 07, 2021

Mid-January Short Interest Report Shows 8 Stocks with Good Fundamentals and High Short Interest

Sergey Savastiouk

published in Blogs

Mar 10, 2021

How to Start Trading Penny Stocks

Penny stocks have long been marginalized within the professional investment community, oftentimes being painted with a broad brush of simply being “too risky.” Leonardo DiCaprio’s depiction of the penny stock peddling conman, Jordan Belfort, in the Wolf of Wall Street certainly didn’t help.Here are four reasons to start trading them now. Reason #1: Let’s State the Obvious -- Penny Stocks are Cheap A single share of Apple Inc. costs over $350.

Abhoy Sarkar

published in Blogs

May 08, 2020

US unemployment rate jumps to 14.7%, the highest in series history

The U.S. economy’s employment fell by -20.5 million in April. The coronavirus crisis led to unemployment rate soaring to 14.7% in the U.S, the highest rate in the Bureau of Labor Statistics-tracked series history that goes back to 1948. However, the figures were better compared to several economists'/analysts' forecasts of 22 million job losses and 16% unemployment rate. Another unemployment measure that includes those who have stopped looking for work as well as those holding part-time jobs for economic reasons also touched an all-time high of 22.8%.