Editorial StaffAt 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:
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, 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.
Source: Yahoo Finance
