The Raised Bed Top 5

[mrmarket]

Ok..let's try again:

CMG KL PAYC QD TTD

I'll buy one of these soon...which one do you like? And why??

[BlueWolf]

August 19, 2019

I have to preface my comments by saying that I’m not crazy about entering a swing trade in the current market climate, but that being said here are my ratings:

CMG
Revenue/Earnings: Over the long term, CMG has been a successful growth story. In every year since 2009, they have posted YoY revenue growth, although gross profits jinked down significantly from 2015 to 2016. Quarterly growth has been good with every quarter since Q1 of FY 2018 showing solid YoY growth. In the last reported quarter CMG posted 9.2% QoQ and 12.6% YoY growth. Not bad. CMG’s performance versus estimates has been spotty, however. In the last 11 quarters, they have beaten five times, underperformed three times, and hit exactly three times. CMG doesn’t report again until October, 2019. Morningstar has CMG as slightly overvalued.
Pays Dividend: No
Chart: CMG’s long term chart has been a bit of a rollercoaster ride in which there have been peaks in 2012, 2015, and 2019 and valleys in 2009, 2012, and 2018. The daily chart looks solid with the stock pretty much in ascent mode since the correction of Oct-Dec, 2018. There have been a few minor bumps along the way, with the worst coming in June, but after each bump the stock has recovered quickly. The stock is currently in a little bit of a sloppy cup and handle pattern basing at it’s all time high. Chart-wise, it looks ready to dish out a little more upside.
Bottom Line: Since the stock is currently selling for around $820, you would be looking for a 123 point move to make 15%. Since starting a base around 725 in mid June, the stock has risen only 100 points and that includes an earnings call in late July. You therefore might have to be patient with this one as it is unlikely to give you a quick payoff barring any surprise news. When you factor in the spotty record against estimates, a little of the luster comes off this stock.
My Grade (In Terms of a 15% swing trade): B

KL
Revenue/Earnings: Before 2016 there wasn’t a growth story here. In 2016, however, everything changed and revenue rocketed from $120M in FY 2015 to $916M for FY 2018. Over the same period, EPS rose from $.22 to $1.29. They have also shown YoY revenue growth in every quarter since Q1 FY 2018. Last quarter’s YoY growth was a spectacular 33%. I couldn’t call up any estimates data because KL is a Canadian company so I couldn’t do a estimates versus actuals comparison. Morningstar has KL as fairly valued.
Pays Dividend: Yes
Chart: The long term chart since 2015 is a rocket ship, as to be expected based on their tremendous YoY revenue growth. On the daily chart, KL has more or less been in a steady ascent since the Oct-Dec 2018 correction, but it did base quite a while from Mar-Jun 2019. There was a big one day jink down in the stock in early August, but it recovered the very next day, demonstrating some real strength. The most recent action has pretty much parodied the market with the stock in the midst of a modest pullback. This, of course, can create a less then ideal entry, though the most recent bar could indicate that the current little retrace has ended.
Bottom Line: The long term earnings story for KL has been spectacular in recent years as has been the chart action. On quarterly scales and the daily chart things still look good, although the last few days of its chart are a little suspect and might not be ideal for immediate entry.
My Grade (In Terms of a 15% swing trade): B+

PAYC
Revenue/Earnings: The long term growth story for PAYC has been spectacular. Revenue has grown from $56.38M in FY 2011 to $641.62M in FY 2019 (projected). During the same period, earnings have grown from $.03 EPS in FY 2011 to $2.67 for FY 2019 (projected). OK, I’m impressed. On a quarterly basis, revenue is somewhat seasonal, but still, PAYC has shown YoY growth for both revenue and EPS since at least Q1 of FY 2017. For it’s latest quarter, YoY revenue grew 31% and YoY earnings grew 36%. You can’t get much better than that. And here’s the real topper. PAYC has beaten estimates in the last 11 reported quarters (and maybe longer). Morningstar has PAYC as slightly overvalued, which is not unusual for a growth stock like this.
Pays Dividend: No
Chart: The long term chart for PAYC is another rocket ship, which is to be expected with such spectacular growth. On the daily, since the Oct-Dec 2018 correction, PAYC has been in a steady ascent with a couple of modest hiccups. In early June, it jinked down in a one day wide ranging red bar, but then recovered in a single day, always a sign of strength. The stock descended in a modest correction from late July to early August, but also quickly recovered and once again looks strong and posed to climb higher, although you might want to watch out for a potential evening star in the most recent bar.
Bottom Line: Actually, PAYC has been on my radar as a possible long term buy for a while. I don’t know why I never pulled the trigger. There’s just very little not to like about this stock. The earnings story and the chart are both excellent. One note: At current prices, you would be looking for about a $36 move for a 15% gain. The stock hasn’t been prone to making big sudden moves of late, so you might have to wait a few months to hit your target, but it sure looks like this stock still has legs. The only thing that keeps me from giving this stock an A+ is the potential evening star in the daily. The next earnings call is in October, 2019.
My Grade (In Terms of a 15% swing trade): A

QD
Revenue/Earnings: Since QD started filing in 2015 (they went public in 2017), revenue growth has been spectacular going from $235M in FY 2015 to $7.69B in FY 2018. The company also reported an EPS of 7.09 in FY 2017 followed by an EPS of $7.74 in FY 2018, representing solid, but not spectacular 9% YoY growth. QoQ growth had been solid until a disruption in the 3rd quarter of 2018 when revenue dipped from $2.24B to $1.93B in the 4th quarter and EPS dipped from $2.19 to $2.13. Since then their quarterly EPS has grown well past their Q3 FY 2018 high to $3.19 although their revenue has still not reclaimed the Q3 FY2018 high. QD has beaten estimates in 5 out of the last 7 quarters. Morningstar has QD as slightly undervalued.
Pays Dividend: No
Chart: Despite it’s spectacular revenue and earnings growth, the long term QD chart looks like a ski jump. After a precipitous decline following its 2017 IPO, the share price recovered a little of its lost ground in 2019. On the daily chart, the stock has more or less been in ascent since the Oct-Dec 2018 correction, but that ascent has been choppy. On the daily, at least, volatility is the name of the game with this stock with 10+% daily declines as common as gains of the same magnitude. You could easily book a 15% gain in this stock in a few days. You could also take a 15% hit in the same time frame, so beware. Today’s bar also doesn’t look all that promising as it bearishly engulfed the prior day’s bar and then tumbled significantly lower. For me, this doesn’t look like a particularly good place to enter this stock.
Bottom Line: The volatility of this stock on the daily doesn’t bode well in my book for a swing trade. I also don’t like the recent action in terms of providing a good entry, with its very last bar particularly discouraging. The earnings story is not strong enough to outweigh these charting concerns for me, so this one is basically a no go.
My Grade (In Terms of a 15% swing trade): D

TTD (Largely reused from prior writeup)
Revenue/Earnings: In the prior five FY’s, from 2014 to 2018, TTD’s revenue has grown from $44.55M to $477.29M while EPS has grown from -$1.46 to +$1.92. That’s an astonishing five year revenue growth of 971%. TTD’s track record versus revenue estimates is also phenomenal and is a big reason why the share price has gone up so steadily since its IPO. In the last four quarters they have beaten by 31.82%, 200%, 50%, and 41.94%. This company is built to grow, and I think it has a lot more growth in it. Morningstar has the TTD as slightly overvalued, again not unusual for a growth stock.
Pays Dividend: No
Chart: TTD’s long term monthly chart looks like a rocket ship. Since its IPO in late 2016, it has gone from $28.75 to the current price of $231.45, a 705% gain. On the daily chart, the stock seems to have a tendency to base sideways for a while before breaking to the upside, usually because of blowout earnings. Since the next earnings report isn’t until November, you might therefore have to wait several months before you get any kind of big move out of the stock. There are reasons for concern in the most recent price action. TTD recently formed a Doji with a giant topping tail before pulling back slightly. That topping tail gives me some concern as does the fact that the pullback took out the recent pivot low. Additionally, its most recent bar is a large bearish engulfing bar. Granted, these are micro level moves over the very short term and may mean nothing more than there will be more of a modest pullback, but it’s enough to make me cautious about an immediate entry.
Bottom Line: I love this stock and owned it for a long time before recently closing my position (for the time being). I’d give it a much better grade here (it’s an A+ long term, IMHO) if the recent chart action were a little stronger. You should also keep in mind that TTD is rocking a pretty high valuation, so it will need to continue to blow out earnings to keep the share price moving higher.
My Grade (In Terms of a 15% swing trade): B

[jiesen]

Bluewolf.... you are HUUUUUUUGEEEEE!!!!

[mrmarket]

August 19, 2019

I have to preface my comments by saying that I’m not crazy about entering a swing trade in the current market climate, but that being said here are my ratings:

CMG
Revenue/Earnings: Over the long term, CMG has been a successful growth story. In every year since 2009, they have posted YoY revenue growth, although gross profits jinked down significantly from 2015 to 2016. Quarterly growth has been good with every quarter since Q1 of FY 2018 showing solid YoY growth. In the last reported quarter CMG posted 9.2% QoQ and 12.6% YoY growth. Not bad. CMG’s performance versus estimates has been spotty, however. In the last 11 quarters, they have beaten five times, underperformed three times, and hit exactly three times. CMG doesn’t report again until October, 2019. Morningstar has CMG as slightly overvalued.
Pays Dividend: No
Chart: CMG’s long term chart has been a bit of a rollercoaster ride in which there have been peaks in 2012, 2015, and 2019 and valleys in 2009, 2012, and 2019. The daily chart looks solid with the stock pretty much in ascent mode since the correction of Oct-Dec, 2018. There have been a few minor bumps along the way, with the worst coming in June, but after each bump the stock has recovered quickly. The stock is currently in a little bit of a sloppy cup and handle pattern basing at it’s all time high. Chart-wise, it looks ready to dish out a little more upside.
Bottom Line: Since the stock is currently selling for around $820, you would be looking for a 123 point move to make 15%. Since starting a base around 725 in mid June, the stock has risen only 100 points and that includes an earnings call in late July. You therefore might have to be patient with this one as it is unlikely to give you a quick payoff barring any surprise news. When you factor in the spotty record against estimates, a little of the luster comes off this stock.
My Grade (In Terms of a 15% swing trade): B

KL
Revenue/Earnings: Before 2016 there wasn’t a growth story here. In 2016, however, everything changed and revenue rocketed from $120M in FY 2015 to $916M for FY 2018. Over the same period, EPS rose from $.22 to $1.29. They have also shown YoY revenue growth in every quarter since Q1 FY 2018. Last quarter’s YoY growth was a spectacular 33%. I couldn’t call up any estimates data because KL is a Canadian company so I couldn’t do a estimates versus actuals comparison. Morningstar has KL as fairly valued.
Pays Dividend: Yes
Chart: The long term chart since 2015 is a rocket ship, as to be expected based on their tremendous YoY revenue growth. On the daily chart, KL has more or less been in a steady ascent since the Oct-Dec 2018 correction, but it did base quite a while from Mar-Jun 2019. There was a big one day jink down in the stock in early August, but it recovered the very next day, demonstrating some real strength. The most recent action has pretty much parodied the market with the stock in the midst of a modest pullback. This, of course, can create a less then ideal entry, though the most recent bar could indicate that the current little retrace has ended.
Bottom Line: The long term earnings story for KL has been spectacular in recent years as has been the chart action. On quarterly scales and the daily chart things still look good, although the last few days of its chart are a little suspect and might not be ideal for immediate entry.
My Grade (In Terms of a 15% swing trade): B+

PAYC
Revenue/Earnings: The long term growth story for PAYC has been spectacular. Revenue has grown from $56.38M in FY 2011 to $641.62M in FY 2019 (projected). During the same period, earnings have grown from $.03 EPS in FY 2011 to $2.67 for FY 2019 (projected). OK, I’m impressed. On a quarterly basis, revenue is somewhat seasonal, but still, PAYC has shown YoY growth for both revenue and EPS since at least Q1 of FY 2017. For it’s latest quarter, YoY revenue grew 31% and YoY earnings grew 36%. You can’t get much better than that. And here’s the real topper. PAYC has beaten estimates in the last 11 reported quarters (and maybe longer). Morningstar has PAYC as slightly overvalued, which is not unusual for a growth stock like this.
Pays Dividend: No
Chart: The long term chart for PAYC is another rocket ship, which is to be expected with such spectacular growth. On the daily, since the Oct-Dec 2018 correction, PAYC has been in a steady ascent with a couple of modest hiccups. In early June, it jinked down in a one day wide ranging red bar, but then recovered in a single day, always a sign of strength. The stock descended in a modest correction from late July to early August, but also quickly recovered and once again looks strong and posed to climb higher, although you might want to watch out for a potential evening star in the most recent bar.
Bottom Line: Actually, PAYC has been on my radar as a possible long term buy for a while. I don’t know why I never pulled the trigger. There’s just very little not to like about this stock. The earnings story and the chart are both excellent. One note: At current prices, you would be looking for about a $36 move for a 15% gain. The stock hasn’t been prone to making big sudden moves of late, so you might have to wait a few months to hit your target, but it sure looks like this stock still has legs. The only thing that keeps me from giving this stock an A+ is the potential evening star in the daily. The next earnings call is in October, 2019.
My Grade (In Terms of a 15% swing trade): A

QD
Revenue/Earnings: Since QD started filing in 2015 (they went public in 2017), revenue growth has been spectacular going from $235M in FY 2015 to $7.69B in FY 2018. The company also reported an EPS of 7.09 in FY 2017 followed by an EPS of $7.74 in FY 2018, representing solid, but not spectacular 9% YoY growth. QoQ growth had been solid until a disruption in the 3rd quarter of 2018 when revenue dipped from $2.24B to $1.93B in the 4th quarter and EPS dipped from $2.19 to $2.13. Since then their quarterly EPS has grown well past their Q3 FY 2018 high to $3.19 although their revenue has still not reclaimed the Q3 FY2018 high. QD has beaten estimates in 5 out of the last 7 quarters. Morningstar has QD as slightly undervalued.
Pays Dividend: No
Chart: Despite it’s spectacular revenue and earnings growth, the long term QD chart looks like a ski jump. After a precipitous decline following its 2017 IPO, the share price recovered a little of its lost ground in 2019. On the daily chart, the stock has more or less been in ascent since the Oct-Dec 2018 correction, but that ascent has been choppy. On the daily, at least, volatility is the name of the game with this stock with 10+% daily declines as common as gains of the same magnitude. You could easily book a 15% gain in this stock is a few days. You could also take a 15% hit in the same time frame, so beware. Today’s bar also doesn’t look all that promising as it bearishly engulfed the prior day’s bar and then tumbled significantly lower. For me, this doesn’t look like a particularly good place to enter this stock.
Bottom Line: The volatility of this stock on the daily doesn’t bode well in my book for a swing trade. I also don’t like the recent action in terms of providing a good entry, with its very last bar particularly discouraging. The earnings story is not strong enough to outweigh these charting concerns for me, so this one is basically a no go.
My Grade (In Terms of a 15% swing trade): D

TTD (Largely reused from prior writeup)
Revenue/Earnings: In the prior five FY’s, from 2014 to 2018, TTD’s revenue has grown from $44.55M to $477.29M while EPS has grown from -$1.46 to +$1.92. That’s an astonishing five year revenue growth of 971%. TTD’s track record versus revenue estimates is also phenomenal and is a big reason why the share price has gone up so steadily since its IPO. In the last four quarters they have beaten by 31.82%, 200%, 50%, and 41.94%. This company is built to grow, and I think it has a lot more growth in it. Morningstar has the TTD as slightly overvalued, again not unusual for a growth stock.
Pays Dividend: No
Chart: TTD’s long term monthly chart looks like a rocket ship. Since its IPO in late 2016, it has gone from $28.75 to the current price of $231.45, a 705% gain. On the daily chart, the stock seems to have a tendency to base sideways for a while before breaking to the upside, usually because of blowout earnings. Since the next earnings report isn’t until November, you might therefore have to wait several months before you get any kind of big move out of the stock. There are reasons for concern in the most recent price action. TTD recently formed a Doji with a giant topping tail before pulling back slightly. That topping tail gives me some concern as does the fact that the pullback took out the recent pivot low. Additionally, its most recent bar is a large bearish engulfing bar. Granted, these are micro level moves over the very short term and may mean nothing more than there will be more of a modest pullback, but it’s enough to make me cautious about an immediate entry.
Bottom Line: I love this stock and owned it for a long time before recently closing my position (for the time being). I’d give it a much better grade here (it’s an A+ long term, IMHO) if the recent chart action were a little stronger. You should also keep in mind that TTD is rocking a pretty high valuation, so it will need to continue to blow out earnings to keep the share price moving higher.
My Grade (In Terms of a 15% swing trade): B

Amazing...great analysis.

[BlueWolf]

Amazing...great analysis.

Thank you, Mr. Market. 😁

[BlueWolf]

Thank you, jiesen.

[Louetta]

Bluewolf.... you are HUUUUUUUGEEEEE!!!!

True......

[tiedyed1]

These top 5 are all attractive, with TTD and PAYC two i have had an eye on for a while (but no positions).
TTD has a few naysayer analysts who do like to rattle cages and at times subject to a larger than comfortable short community for me - and, as mentioned, really needs to continue to blow out earnings, so that has kept me at bay.
PAYC has all the right ingredients for a retirement account holding for me, but not sure about time frame for 15%. (I love the business model.)

But when I focus on 15% I am liking KL. These guys are truly digging up gold and the cash is flowing. The sentiment for reduced rates will continue as long as there is an ongoing trade war and the price of gold will keep miners in favor. Their most recent quarter was very impressive and despite increased costs (which no one likes) I feel timing is good as costs will be under the radar as they move forward and next quarter should be just as strong or better...so this upward pps should continue higher and is probably the most undervalued out of this bunch.

BLUEWOLF's analysis has devoured any other words for me... and is tremendous asset to this board. Please keep sharing - your posts are awesome and highly valued here.

[BlueWolf]

Thank you for the kind words, tiedyed.

[jiesen]

August 19, 2019
PAYC
...
My Grade (In Terms of a 15% swing trade): A

yep... not only are you HUUUUUUUGGGEEEE, but you picked it, too!
I agree, too, that PAYC will hit pay dirt soon, and will be a buyer come Monday morning. (shoulda listened to you and got some today)