Rick Pendergraft's Avatar
Rick Pendergraft
published in Blogs
Sep 24, 2019
With earnings out of the way, is Adobe ready to climb again?

With earnings out of the way, is Adobe ready to climb again?

Software giant Adobe (Nasdaq: ADBE) reported earnings on September 17 and the company beat on the top and bottom line. The company was expected to report EPS of $1.42 and the actual figure came in at $1.61. The reported revenue beat by $10 million at $2.83 billion. Despite the beat, the stock dipped slightly after the report as the company’s guidance was a little disappointing. Personally I think that was because expectations were pretty high for Adobe heading in to the report.

Now that the earnings report is out of the way, is the stock ready to resume its upward trend? If we look at the weekly chart we can see how the stock trended higher from late 2016 through the third quarter of 2018. The stock pulled back in the fourth quarter before starting a new uptrend from December through mid-July. In late July the stock started pulling back from its overbought levels.

Now we see that the weekly stochastic readings are reaching oversold territory and are as low as they have been in the last three and a half years. The 10-week RSI dipped below the 50 level and that is something that hasn’t happened all that often in recent years.

Something else that stands out on the chart is the fact that the stock has only been below its 52-week moving average on a few occasions. The stock is approaching that trend line at this time. With the lower rail of the trend channel and the 52-week moving average in place as possible support, the stock may be ready to move higher again.

In addition to the setup on the weekly chart, the Moving Average Convergence Divergence (MACD) Histogram just turned positive. According to Tickeron’s Technical Analysis Overview, in 32 of 47 cases where Adobe's MACD histogram became positive, the price rose further within the following month. The odds of a continued uptrend are 68%.

Turning our attention to the fundamentals, Adobe has performed really well over the last few years. The company has seen earnings grow by an average of 43% per year over the last three years while sales have grown by 24% per year. In the most recent report, earnings were up 18% and sales were up 24%. Analysts expect earnings to grow by 16% for 2019 as a whole while sales are expected to increase by 23.5%.

Adobe’s management efficiency measurements are well above average with a return on equity of 37.8% and a profit margin of 39.6%. When we combine these figures with the sales growth, we get the SMR rating from Tickeron. Adobe’s SMR rating is 12 and that indicates very strong sales and a profitable business model.

We also see that the Tickeron Profit vs. Risk Rating for Adobe is 13, indicating low risk on high returns. The average Profit vs. Risk Rating for the industry is 79, placing this stock much better than average.

Looking at the sentiment toward Adobe, 19 out of 30 analysts have the stock rated as a “buy” while 11 have it rated as a “hold”. This puts the buy percentage at 63.3% and that is slightly below average which is hard to believe considering how well Adobe has performed as a company and how well the stock has performed in recent years.

The short interest ratio is at 2.63 currently and that is slightly below the average stock. However, for Adobe this is one of the highest readings in the past year and the ratio has been trending higher over the last few months. The three highest readings in the past year have all come in the last two months. This suggests that the bearish sentiment toward the stock is increasing and that is a good thing from a contrarian perspective.

Related Tickers: ADBE
Related Portfolios: APPLICATION SOFTWARE,TECHNOLOGY ETFs
Sergey Savastiouk's Avatar
Sergey Savastiouk
published in Blogs
Mar 07, 2021
4 Tricks Hedge Funds Use to Get Ahead

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's Avatar
John Jacques
published in Blogs
Mar 22, 2018
A.I. Stock Market Predictions: Head & Shoulders

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's Avatar
Sergey Savastiouk
published in Blogs
Jul 10, 2020
3 Stocks to Buy if Coronavirus Second Wave Hits

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's Avatar
Edward Flores
published in Blogs
Feb 06, 2021
How to Become the Millionaire Next Door

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's Avatar
Alla Petriaieva
published in Blogs
Feb 23, 2021
Is Ethereum’s Bomb about to Explode?

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's Avatar
Sergey Savastiouk
published in Blogs
Aug 07, 2018
When Is the Next Recession Coming?

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's Avatar
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

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's Avatar
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's Avatar
Sergey Savastiouk
published in Blogs
Mar 10, 2021
How to Start Trading Penny Stocks

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's Avatar
Abhoy Sarkar
published in Blogs
May 08, 2020
US unemployment rate jumps to 14.7%, the highest in series history

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%.