2020 Marked Up!
A Fundamental & Technical Analysis
Summary: Amazon.com, Inc. engages in the retail sale of consumer products and subscriptions in North America and internationally. The company operates through three segments: North America, International, and Amazon Web Services (AWS). It sells merchandise and content purchased for resale from third-party sellers through physical and online stores. The company also manufactures and sells electronic devices, including Kindle, Fire tablets, Fire TVs, Rings, and Echo and other devices; provides Kindle Direct Publishing, an online service that allows independent authors and publishers to make their books available in the Kindle Store; and develops and produces media content. In addition, it offers programs that enable sellers to sell their products on its Websites, as well as its stores; and programs that allow authors, musicians, filmmakers, skill and app developers, and others to publish and sell content.
Internet & Direct Marketing Retail
AMZN was not the most powerful leader of 2020 by any means. However, its EPS, revenues and EPS estimates cannot be ignored, and its price volume action was extremely healthy and constructive.
It clearly respected its 23-EMA throughout the length of its run and despite ultimately moving sideways the past 6 months, AMZN is still the leader of its group.
AMZN’s quarter over quarter EPS has accelerated over the prior 3 quarters to a rate of 192% in their most recent quarter, backed by a solid stream of sales.
Their annual earnings grew by 51% in 2020 and the street is looking for 29% in 2021.
Also, AMZN’s ROE has accelerated from 18.5% to 25.5% over the prior 3 quarters and it continues to be well loved by 7 of MarketSmith’s flagship funds.
AMZN broke out through $1,933.02 on April 6th as the NASDAQ followed through and made an all-time high of $3,552.25 on September 2nd for a gain of 84% in 20 weeks.
AMZN has gone on to build a constructive base since, and with a little more time, it looks like AMZN could be off to the races again in 2021.
Summary: CrowdStrike Holdings, Inc. provides cloud-delivered solutions for next-generation endpoint protection in the United States, Australia, Germany, India, Romania, and the United Kingdom. It offers 11 cloud modules on its Falcon platform through software as a service subscription-based model that covers various security markets, such as endpoint security, security and IT operations, and threat intelligence to deliver comprehensive breach protection even against today’s most sophisticated attacks. The company primarily sells its platform and cloud modules through its direct sales team. CrowdStrike Holdings, Inc. was founded in 2011 and is headquartered in Sunnyvale, California.
The computer security software group was on fire in 2020 and CRWD was a major leader in the space.
CRWD grew their quarter over quarter earnings at a triple digit pace over the prior 4 quarters and saw acceleration over the last three.
CRWD’s quarter over quarter revenue stream grew at a rate of 84 – 89% over the prior 4 quarters, which is not only large, but consistent.
CRWD has seen a tremendous pick-up in their annual earnings over the last 3 years and the street is looking for 45% growth in 2021.
Institutional sponsorship grew consecutively for the last five quarters and Fidelity’s Contrafund, which is a MarketSmith flagship fund, had a position as of the end of 2020.
CRWD broke out through $59.50 on April 7th, one day after the NASDAQ followed through and hit an all-time high of $227.39 on December 24th for a move of 282% in 34 weeks.
Summary: DocuSign, Inc. provides cloud-based software in the United States and internationally. The company provides an e-signature solution that enables businesses to digitally prepare, execute, and act on agreements. It also offers DocuSign CLM, which automates workflows across the entire agreement process; Intelligent Insights that use artificial intelligence to search and analyze agreements by legal concepts and clauses; Gen for Salesforce, which allows sales representatives to automatically generate agreements with a few clicks from within Salesforce; and Negotiate for Salesforce that supports for approvals, document comparisons, and version control. The company was founded in 2003 and is headquartered in San Francisco, California.
Other than a rough quarter in July 2019, DOCU’s fundamental snapshot is top notch.
DOCU was a major leader in the computer enterprise software group, which exhibited tremendous strength throughout 2020, and was a clear driver behind the powerful trend in the general market.
Despite not seeing quarter over quarter acceleration, DOCU grew quarter over quarter earnings at a swift pace.
Fortunately, DOCU’s quarterly earnings growth was backed by solid double digit revenue growth, which accelerated consecutively over the last 4 quarters.
DOCU’s annual earnings growth over the last 5 years was textbook. Their earnings picked up every year consecutively from a loss of $0.79/share in 2016, to a gain of $0.31/share in 2020.
It certainly doesn’t hurt that DOCU’s estimates for fiscal ’21 and ’22 are enormous at 139% and 50% respectively.
Additionally, DOCU’s ROE has increased every quarter for the last 4 quarters from 10.2% to 24.8% in the most recent quarter.
DOCU broke out through $88.27 on March 30th about a week before the NASDAQ followed though and ran up to an all-time high of $290.23 on September 2nd for a gain of 229%.
Summary: Etsy, Inc. operates online market places for buyers and sellers primarily in the United States, the United Kingdom, Canada, Australia, France, and Germany. Its online market places include Etsy.com and Reverb.com. The company offers approximately 66 million items in its various retail categories to buyers. It also provides various seller services, including Etsy Payments, a payment processing service; Etsy Ads, an advertising platform; and Etsy Shipping Labels, which allows sellers in the United States, Canada, the United Kingdom, and Australia to purchase discounted shipping labels. Etsy, Inc. was founded in 2005 and is headquartered in Brooklyn, New York.
Internet & Direct Marketing Retail
ETSY’s fundamental snapshot was outstanding by the end of 2020 and has been for a few years now.
Even though ETSY experienced a notable slowdown in their quarter over quarter earnings growth during the second half of ‘19 and the first quarter of ‘20, they experienced triple digit earnings growth and acceleration of 113% to 367% over the 3 quarters prior, from the quarter ended December ‘18 to quarter-end, June ‘19.
ETSY’s quarter over quarter revenue growth also experienced a slowdown during the second half of ‘19 and the first quarter of ‘20, but not nearly to the same degree. Their revenue growth only experienced a slight deceleration comparatively, and then accelerated in a big way over its most recent 3 quarters, which carried over to their earnings over the same period.
Not surprisingly, ETSY’s quarter over quarter growth in ROE also exploded from 18.6% to 48.5% over its most recent 3 quarters.
ETSY’s annual earnings growth has been accelerating at a swift pace over the last 5 years, from a loss of $0.49/share in 2015 to what’s shaping up to be a huge year once their final quarter of 2020 is reported.
The retail internet group has been among the top ranks of leading industry groups for a few years now and ETSY has been a big RS winner since the beginning of 2016.
Finally, institutional sponsorship in ETSY has picked up in a big way over the prior 5 quarters and as of the most recent quarter, 4 of MarketSmith’s flagship funds hold positions.
ETSY broke out through $44.40 on April 6th as the NASDAQ followed through and ran up to an all-time high of $198.50 on December 22nd.
Summary: Fiverr International Ltd. operates an online marketplace worldwide. Its platform enables sellers to sell their services and buyers to buy them. The company’s platform includes approximately 300 categories in eight verticals, including graphic and design, digital marketing, writing and translation, video and animation, music and audio, programming and technology, business, and lifestyle. The company was founded in 2010 and is headquartered in Tel Aviv, Israel.
Internet & Direct Marketing Retail
FVRR was an extremely powerful leader in the retail internet group in 2020. The retail internet group exhibited solid relative strength throughout the year, with many other high quality, high relative strength stocks in the group confirming its move.
2020 will be FVRR’s first year of positive earnings, assuming their final report for the year is near what the street is currently expecting. In ‘19 FVRR lost $0.50/share. However, analysts are currently looking for them to earn about $0.27/share by the end of fiscal 2020.
FVRR’s spectacular earnings acceleration story doesn’t end here. The street is looking for a staggering 159% growth over fiscal ‘21.
FVRR’s quarter over quarter earnings showed a similar turnaround from negative to positive and have accelerated big time over the last 2 quarters.
The acceleration in FVRR’s institutional sponsorship has been explosive over the prior 7 quarters. Not to mention, 4 of MarketSmith’s flagship funds held positions in the stock as of their most recent quarter.
FVRR broke out through $26.98 on April 8th and ran up to an all-time high of $228.49 on December 22nd for a gain of 747% in 34 weeks.
NIO Limited Designs
Summary: NIO Limited designs, manufactures, and sells electric vehicles in the People’s Republic of China, Hong Kong, the United States, the United Kingdom, and Germany. The company offers five, six, and seven-seater electric SUVs. It is also involved in the provision of energy and service packages to its users; marketing, design, and technology development activities; manufacture of e-powertrains, battery packs, and components; and sales and after-sales management activities. NIO Limited was founded in 2014 and is headquartered in Shanghai, China.
NIO is clearly not included in this model book for its phenomenal earnings track record. They haven’t earned a dime since 2016 and the street is looking for a loss of $0.33/share for fiscal 2021. However, this should be a big improvement over their EPS loss for 2020 once they report their final quarter.
Conversely, NIO’s quarter over quarter revenue stream is worth noting. By no means have their revenues been accelerating in a smooth, consistent manner. However, they have exhibited the ability to generate some extremely powerful quarters, especially their most recent 2, at 140% and 159% respectively.
The major reason NIO was included in this model book was because it has been part of one of the most powerful themes, sectors/industry groups in the market for the last few years and it appears as if this should continue well into the future.
Remember, nearly 50% of a leading stock’s price performance is directly correlated to its sector and industry group, and NIO has been a super RS leader in the space.
NIO started off the year trading below $5.00, a relatively ignorable penny stock. However, by August 25, 2020 it broke out of a cup and handle base through $15.45 on huge volume, offering CANSLIM style investors a clear buying opportunity.
For those traders/investors open to a bit more risk, NIO could have been purchased even earlier, at lower prices, due to its extreme liquidity. Nevertheless, even if you didn’t get started until $15.45 at the end of August, NIO reached an all-time high of $66.99 on January 11, 2021, which is a gain of 334% in about 10 weeks.
Summary: Pinterest, Inc. provides a visual discovery engine in the United States and internationally. The company’s engine allows people to find inspiration for their lives, including recipes, home and style ideas, travel destinations, and others. It shows them visual recommendations based on people’s personal tastes and interests. Pinterest, Inc. was founded in 2008 and is headquartered in San Francisco, California.
Interactive Media & Services
PINS has been a high RS, powerful leader in the internet content group, which has graced the lists of top performing industry groups for quite some time now.
PINS quarter over quarter earnings growth is powerful, yet erratic. Their quarter over quarter revenue stream on the other hand, has grown at a much more stable pace, other than a quick dip in the quarter ended June ‘20.
The pace at which PINS’ annual earnings have grown over the last 5 years has been nothing short of phenomenal and the street is expecting 129% growth over fiscal ‘21.
Institutional sponsorship in PINS has picked up at a furious pace, showing big acceleration every quarter for the last 8 quarters consecutively.
Additionally, 5 of MarketSmith’s flagship funds held positions in PINS as of their most recent quarter.
PINS is a very recent, high quality, liquid IPO. It came public on April ‘19, so it still has plenty of room to continue growing from here assuming their earnings stay on track.
PINS broke out through $16.13 on April 8th and ran up to an all-time high of $75.44 on December 23rd for a gain of 368% in 34 weeks.
Peloton Interactive, Inc.
Summary: Peloton Interactive, Inc. provides interactive fitness products in North America and internationally. It offers connected fitness products, such as the Peloton Bike and the Peloton Tread, which include a touchscreen that streams live and on-demand classes. The company also provides connected fitness subscriptions for multiple household users, and access to all live and on-demand classes, as well as the Peloton Digital app for connected fitness subscribers to provide access to its classes. Peloton Interactive, Inc. was founded in 2012 and is headquartered in New York, New York.
PTON has been one of the most powerful RS leaders in its group over ‘20, which is the leisure services group as per MarketSmith. Both the leisure services group as well as the leisure products group were big contributors to the strength behind the overall trend in ‘20.
Additionally, many fundamentally sound, leading stocks throughout the entire sector were given a big boost by the COVID-19 lockdowns.
PTON reported quarter over quarter earnings growth of 259% and 211% over their most recent 2 quarters on the heels of losses for the 6 quarters prior.
Conversely, PTON’s earnings have been fueled by massive quarter over quarter revenue growth over the past 8 quarters, which is a huge positive.
PTON has yet to report a positive year of earnings. However, they lost much less in ‘20 than they did in ‘19, and the street is expecting enormous annual growth over ‘21 and ‘22.
Currently, the street is looking for PTON to earn $0.35 in ‘21 vs a loss of $0.32 in ‘20, and their current estimate for ‘22 is $0.76, which would be an increase of 117%.
Finally, institutional sponsorship in PTON has accelerated at an incredible pace over the last 6 consecutive quarters. Also, two of MarketSmith’s flagship funds hold positions in the stock as of their most recent quarter.
PTON broke out through $27.38 on March 30th and ran up to an all-time high of $167.37 on December 24th for a gain of 368% in 35 weeks.
Ultragenyx Pharmaceutical Inc.
Summary: Ultragenyx Pharmaceutical Inc., a biopharmaceutical company, focuses on the identification, acquisition, development, and commercialization of novel products for the treatment of rare and ultra-rare genetic diseases in the United States. Its biologic products include Crysvita (burosumab), an antibody targeting fibroblast growth factor 23 for the treatment of X-linked hypophosphatemia; and Mepsevii, an enzyme replacement therapy for the treatment of children and adults with Mucopolysaccharidosis VII.
RARE is part of the Biomed/Biotech group, which has been a major contributor to the general market’s uptrend for quite some time now, but was a notable force behind the market’s powerful move higher in ‘20.
As per MarketSmith, the biomed/biotech group currently consists of 645 stocks and is the third strongest group of the 14 groups in the medical sector, many of which have participated
By no means is RARE an earnings story, which is quite often the case in the biomed/biotech group.
In many cases however, the leaders in this group will have a powerful revenue stream as is the case with RARE.
RARE’s quarter over quarter earnings growth were nothing short of spectacular over the prior 8 quarters, and their quarter over quarter earnings acceleration over their most recent prior 3 quarters was an eye popping 100%, 156% and 216% consecutively.
Institutional sponsorship in RARE has increased consecutively for the last 4 quarters and 3 of MarketSmith’s flagship funds held positions in the stock as of their most recent quarter.
RARE broke out through $45.40 on April 1 and rose to an all-time high of $179.65 on December 24th, for a gain of 296% in 31 weeks.
Summary: Snap Inc. operates as a camera company in the United States and internationally. The company offers Snapchat, a camera application that helps people to communicate through short videos and images called Snaps. It also provides Camera, a tool to personalize and add context to Snaps; Chat that allows creating and watching stories, chatting with groups, making voice and video calls, and communicating through a range of contextual stickers and Bitmojis; and Discover that helps to surface the stories and shows from publishers, creators, and the community based on a user’s subscriptions and interests.
Interactive Media & Services
SNAP was an extremely powerful leader in the internet content group throughout 2020. Furthermore, the internet content group exhibited consistent strength throughout ‘20 and was home to several other powerful, high relative strength leaders with superior fundamentals.
SNAP came public during the first week of March ‘17 and took until the third week in October of ‘20 to find a low, recover and ultimately break out through the $26.05 high it printed on the day of its IPO.
That’s basically a 32 month IPO U-turn which is very easy to see on its monthly chart. It ultimately carves out a big inverse head and shoulders pattern, also referred to as a head and shoulders bottom over that period.
SNAP’s quarter over quarter earnings are nothing to write home about and it has yet to finish in the black on an annual basis going back the last 7 years.
Conversely, SNAP’s quarter over quarter revenues were not only solid, but very consistent. Other than a dip to 17% in the quarter ended June ‘20, SNAP reported quarter over quarter sales in the 40% – 50% range every other quarter, going back 8 quarters.
Additionally, SNAP’s institutional sponsorship has increased every quarter for the last 8 quarters consecutively. Their fund ownership grew from 195 funds for the quarter ended March ‘19, to 953 funds for the quarter ended Dec ‘20. That is an increase of 389%!
It is also worth noting that 4 of MarketSmith’s flagship funds held positions in the stock as of the December ‘20 quarter end.
SNAP broke out through $12.60 on April 8th and ran up to an all-time high of $54.71 on December 17th for a gain of 334% in 33 weeks.
Summary: Square, Inc. provides, together with its subsidiaries, payment and point-of-sale solutions in the United States and internationally. The company’s commerce ecosystem includes point-of-sale software and hardware that offers sellers payment and point-of-sale solutions. It provides hardware products, including Magstripe reader, which enables swiped transactions of magnetic stripe cards; Contactless and chip reader that accepts Europay, MasterCard, and Visa (EMV) chip cards and Near Field Communication payments; Square Stand, which enables an iPad to be used as a payment terminal or full point of sale solution; Square Register that combines its hardware, point-of-sale software, and payments technology; Square Terminal, a portable payments device that replaces keypad terminals, which accepts various payment types, such as tap, dip, and swipe, as well as prints receipts; and managed payments solutions.
IT Services – Data Processing
SQ is a well-known name currently in the credit card/payment processing industry group as per Marketsmith’s database, which is broken up into 197 industry groups.
The credit card/payment processing group may not always be ranked in the top third of all 197 industry groups. Nevertheless, it has home to quite a few powerful leaders, with superb fundamentals for ‘20 and well before.
I have found that as long as there are at least 3 or 4 other high quality, high relative strength stocks in the same group for confirmation, you are in good shape. This is more important than the stock’s industry group rank.
SQ’s quarter over quarter earnings clearly took a hit in the quarter ended March ‘20. However, it is important to keep in mind that SQ is just one of many that saw a dip over the same time period due to COVID-19. Millions upon millions of people were hurt so bad financially that they were unable to continue covering their most basic necessities, like housing and food.
SQ’s quarter over quarter revenue growth was much more resilient and even saw notable acceleration over their 3 most recent quarters. For the quarters ended March, June and September of ‘20, SQ grew their revenues at 44%, 64% and 140% respectively.
SQ’s sponsorship increased every quarter for the last 6 quarters. Not to mention, 6 of MarketSmith’s flagship funds held positions in the stock as of their most recent quarter.
Finally, SQ’s ROE is currently at a stout 27%.
SQ broke out through $59.25 on April 9th and ran up to an all-time high of $243.38 on December 22nd for a gain of 311% in 33 weeks.
Summary: Tesla, Inc. designs, develops, manufactures, leases, and sells electric vehicles, and energy generation and storage systems in the United States, China, Netherlands, Norway, and internationally. The company operates in two segments, Automotive; and Energy Generation and Storage. The Automotive segment offers sedans and sport utility vehicles. It also provides electric powertrain components, systems, and services for electric vehicles through its company-owned service locations, Tesla mobile service technicians, as well as sells used vehicles. Tesla, Inc. was founded in 2003 and is headquartered in Palo Alto, California.
TSLA was one of the most powerful leading growth stocks of 2020. It is the clear leader in the red hot electric vehicle space, showing triple-digit, quarter over quarter earnings growth of 140%, 300%, and 105% for the quarters ended March, June, and September of ‘20.
TSLA’s quarter over quarter revenues are far from stable, although they are certainly not lacking, with 39% growth reported in their most recent quarter.
TSLA’s annual earnings growth has been accelerating at a furious pace since 2017. TSLA is expected to earn $2.40/share once their final quarter is reported for fiscal ‘20, and the street is currently looking for them to earn $3.87/share in 2021, which would be 61% growth.
Institutional sponsorship in TSLA has picked up every quarter, for the last 7 quarters and 3 of MarketSmiths flagship funds held positions in the stock as of their most recent quarter.
TSLA broke out through $154.99 on April 27th and ran up to an all-time high of $718.72 on December 31st for a gain of 364% in 32 weeks.
Zillow Group, Inc.
Summary: Zillow Group, Inc. operates real estate brands on mobile and the web in the United States. It operates through three segments: Homes; Internet, Media & Technology; and Mortgages. The company’s platform offers buying, selling, renting, and financing services for residential real estate. It also provides a suite of marketing software and technology solutions; and advertising services. The company’s portfolio of consumer brands consists of Zillow, Zillow Offers, Zillow Home Loans, Trulia, StreetEasy, HotPads, Naked Apartments, and Out East; and business brands for real estate, rental, and mortgage professionals include Mortech, dotloop, Bridge Interactive, and New Home Feed. Zillow Group, Inc. was founded in 2004 and is headquartered in Seattle, Washington.
Interactive Media & Services
Z is the clear leader in its space, as well as the household name, or go-to website when it comes to checking on the prices of homes and related information.
Z’s quarter over quarter earnings finally turned positive in their September ‘20 quarter after reporting 6 negative quarters in a row. They reported a gain of $0.37/share vs a loss of $0.12/share for the same quarter a year prior, which is 408% growth.
Overall, Z’s quarter over quarter revenue growth has been rather powerful, glancing back over the prior 8 quarters. However, they’ve experienced a sharp deceleration over the prior 3 quarters. Their quarter over quarter revenues for the quarters ended in March, June, and September of ‘20, shrunk to the tune of 148%, 28%, and -112% respectively, which is far from ideal.
Conversely, Z’s earnings and revenue estimates moving forward look a whole lot better. Their consensus earnings estimate is currently for $0.27/share vs -$0.26/share in the quarter a year prior, which is an enormous jump, despite the expected slowdown in quarter over quarter revenue growth over the next couple quarters.
Institutional sponsorship in Z hasn’t skipped a beat. It has picked up every quarter consecutively for the last 8 quarters which is 50% growth in the number of funds that held positions in the stock as of the last quarter.
Additionally, 2 of MarkstSmith’s flagship funds held positions in the stock as of their most recent quarter.
Z broke out through $43.74 on Aril 28th and ran up to an all-time high of $144.30 on December 22nd for a gain of 230% in 31 weeks.
Zoom Video Communications, Inc.
Summary: Zoom Video Communications, Inc. provides a video-first communications platform in the Americas, the Asia Pacific, Europe, the Middle East, and Africa. The company’s product portfolio includes Zoom Meetings that offers HD video, voice, chat, and content sharing through mobile devices, desktops, laptops, telephones, and conference room systems; Zoom Phone, an enterprise cloud phone system that provides secure call routing, call queuing, call detail reports, call recording, call quality monitoring, voicemail, switch to video, and other services, as well as inbound and outbound calling services; and Zoom Chat enables sharing messages, images, audio files, and content in desktop, laptop, tablet, and mobile devices for meeting and phone customers.
ZM’s fundamental picture is absolutely off the charts! It would be hard to qualify both their quarter over quarter and annual earnings and revenues as anything less than explosive.
Therefore, it is not surprising that ZM exhibited such massive relative strength, even as the general market was undergoing a sharp decline back in February and March.
Not only did ZM start to display relative strength well before the NASDAQ followed through on April 6, it was showing clear strength and power before COVID-19 really became a concern, which in turn propelled ZM even higher as it became one of the “go-to” stay-at-home stocks.
There is no shortage of other companies that make similar software when it comes to video teleconferencing, yet ZM has taken over as the clear new leader in the space.
ZM is one of the 83 stocks that make up the computer enterprise software group in MarketSmith’s database, which was one of the strongest groups during 2020, and home to many other big winners with superior fundamentals during the year.
ZM’s quarter over quarter earnings growth over the last 8 quarters was massive. Last year their quarter over quarter growth was 275%, 567%, 999% and 999% for the quarters ended January, April, July and October of ‘20 respectively. That is some seriously huge earnings acceleration.
ZM’s quarter over quarter revenue growth over the same period was 78%, 169%, 355% and 367%, which is also an example of what incredible acceleration looks like.
It should be no surprise that ZM’s annual earnings were also not only enormous, but also show ridiculous acceleration from 2018 – 2020 and the street is currently looking for 731% growth in 2021.
Institutional sponsorship in ZM has picked up every quarter, for the last 7 quarters and much like their earnings and revenue numbers shows massive acceleration. Also, one of MarketSmith’s flagship funds held a position in the stock as of their most recent quarter.
ZM broke out through $69.24 on January 6th and ran up to an all-time high of $588.84 on October 19th for a gain of 751% in 37 weeks.