A advance of 65.69% in 2018 for shares of Netflix, Inc. (NFLX) tells a story of atypical bullish trading activity accompanying the move. This is a household delegate for Mapsignals, and we last wrote a bullish article on the stock on July 19, 2017. Since then, deals of Netflix are up 81.2%.
The main criteria we look for when betting on a top growth variety include improving fundamentals, leading technicals and bullish trading motion in the shares. I’ll go into the fundamental picture later, but the true tell on the near-term track of the stock lies in the trading activity. At many points in 2018, Netflix shares be dressed increased in price alongside an increase in volume. This can be indicative of stiff money accumulating shares. The bottom line here is that the formalities in which a stock trades can oftentimes alert you to the forward fundamental image more so than simply looking at a company’s financials alone.
For Mapsignals, the strongest cite for of positive price momentum is obtained by measuring potential institutional buying in the rations. In 2018, Netflix has logged 26 of these rare signals (see tabulation). We like to see continual bullish activity in the shares alongside solid ship fundamentals, as this indicates that demand for the stock should multiplication over time.
In the chart below, Netflix is sitting right at the 200-day touching average. The shares should see demand, as we have not seen UI sell signals in Netflix corny during the latest pullback for the market:
Mapsignals’ goal is to identify tomorrow’s top stocks today. We’re basically looking for outlier followings with healthy fundamentals accompanied by outsized, unusual institutional swop activity. By studying these data points, we can make an educated guestimate as to which equities institutions are trafficking in and marry this information with fundamentally undisturbed companies. We want the odds on our side when looking for the highest-quality reservoirs.
When we decide on the strongest candidate for long-term growth, we consider multifarious technical areas important to success. A few of these factors for Netflix are as check outs:
- Year-to-date (YTD) outperformance vs. market: +62.56% vs. SPDR S&P 500 ETF (SPY)
- YTD outperformance vs. sector: +55.97% vs. Technology Superior Sector SPDR ETF (XLK)
- Bullish unusual trading signals
Just to pretentiousness you graphically what our unusual trading activity signal looks analogous to, have a look at all of the UI signals Netflix stock has made over the history year:
Now, we take it a step further and score the best stocks give someone an idea of this activity. Below, you can see the historical times that Netflix turned buy signals for Mapsignals, beginning in 2017. These are the highest-rated signals in our selection universe:
On top of a great technical picture, one should also look at the mercy of the hood to see if the fundamental picture supports a long-term investment. As you can see, Netflix has a trusty revenue growth rate:
- Q3 year-over-year streaming revenue growth grade: +36%
- Q3 YoY operating margin expansion: +500bps
- Q4 subscription growth guidance: +7.6 million lay out net additions
Netflix checks the box on strong technicals and fundamentals while appearance bullish institutional momentum in 2018. We believe that the current even for the shares is in position for further upside. All of this points to further long-term bullish motion for the stock.
The Bottom Line
Netflix represents a potential buying chance for the long-term investor. Given the solid revenue growth rate, Q4 promise guidance and multiple unusual accumulation signals, this stock could be usefulness a spot in an income-oriented portfolio.
To learn more about Mapsignals’ institutional signals, desire visit our “About Us” page.
Disclosure: The author holds a long-term situation in Netflix shares at the time of publication.
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