Financial services/mobile payment company Square said that it bought about 4,709 bitcoins for $50 million.
Cryptocurrency Bitcoin has surged +49% in price so far this year.
Square believes that cryptocurrency is an instrument of “economic empowerment” and that is offers a way for the world to participate in a global monetary system, which aligns with the company’s purpose. The investment in Bitcoin represents around 1% of Square’s total assets as of the end of second-quarter 2020.
Square launched bitcoin trading in 2018 for its Cash App customers.
The company recently launched the Cryptocurrency Open Patent Alliance, a nonprofit organization focused on crypto innovation.
Tickeron's AI-powered scorecard rates SQ a "STRONG BUY".
According to Tickeron, SQ's MACD Histogram crosses above signal line
The Moving Average Convergence Divergence (MACD) for SQ turned positive on September 25, 2020. Looking at past instances where SQ's MACD turned positive, the stock continued to rise in 32 of 37 cases over the following month. The odds of a continued upward trend are 86%.
Current price $184.01 is above $145.64 the highest support line found by A.I. Throughout the month of 09/04/20 - 10/07/20, the price experienced a +23% Uptrend. During the week of 09/30/20 - 10/07/20, the stock enjoyed a +11% Uptrend growth.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on September 21, 2020. You may want to consider a long position or call options on SQ as a result. In 63 of 79 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 80%.
SQ moved above its 50-day Moving Average on September 14, 2020 date and that indicates a change from a downward trend to an upward trend.
Following a +7.38% 3-day Advance, the price is estimated to grow further. Considering data from situations where SQ advanced for three days, in 288 of 355 cases, the price rose further within the following month. The odds of a continued upward trend are 81%.
The Aroon Indicator entered an Uptrend today. In 328 of 384 cases where SQ Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are 85%.
Bearish Trend Analysis
The 10-day RSI Indicator for SQ moved out of overbought territory on October 06, 2020. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 66 similar instances where the indicator moved out of overbought territory. In 40 of the 66 cases, the stock moved lower in the following days. This puts the odds of a move lower at 61%.
The Stochastic Indicator demonstrated that the ticker has stayed in the overbought zone for 10 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where Apple declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 65%.
SQ broke above its upper Bollinger Band on October 05, 2020. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
Fundamental Analysis (Ratings)
Tickeron has a positive outlook on this ticker and predicts a further increase by more than 4.00% within the next month with a likelihood of 88%. During the last month, the daily ratio of advancing to declining volumes was 2.1 to 1.
The Tickeron PE Growth Rating for this company is 9 (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Price Growth Rating for this company is 35 (best 1 - 100 worst), indicating steady price growth. SQ’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron SMR rating for this company is 57 (best 1 - 100 worst), indicating strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Valuation Rating of 91 (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: SQ's P/B Ratio (41.38) is slightly higher than the industry average of (6.50). SQ has a moderately high P/E Ratio (300.85) as compared to the industry average of (91.62). Projected Growth (PEG Ratio) (0.27) is also within normal values, averaging (6.12). Dividend Yield (0.00) settles around the average of (0.33) among similar stocks. P/S Ratio (7.85) is also within normal values, averaging (7.70).
The Tickeron Profit vs. Risk Rating rating for this company is 100 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. SQ’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 68, placing this stock worse than average.