Strong earnings report and upward guidance from Workday (WDAY)…. Not too late to buy. Here’s why. (June 02, 2017)
WDAY
Workday ( NYSE:WDAY ); buy it. This stock is really strong. The thing is, they reported a pretty strong quarter and they raised their guidance, which is important. This is in the cloud industry, data management, time tracking, stuff like that, if the economy is growing these guys are going to do well. The thing that is important to know is their P/E is 290. Their earnings are basically flat until recently. Over the last three quarters, compare those quarters to the same quarter the prior year, 400 percent growth, 800 percent growth, 383 percent growth, that is in earnings. Their revenues, their sales grow at about 35 percent per quarter. That is monster growth.
And so a P/E of 290, try Amazon’s ( NASDAQ:AMZN ) P/E.. I am not saying these guys are Amazon ( NASDAQ:AMZN ), but what I am saying is, ideally, yes it would have been nice to have bought this stock when it first broke out at 85.00 from this squeeze. If you did that, well maybe it is time to add to your position. The thing is, the stock is under accumulation, it has got a fairly short interest ratio, it would take about eleven days to cover. When a stock is like this, where the underlying company is growing so fast.
This is not a stock that is under institutional distribution. This is a stock that is under institutional accumulation. They have only been around since 2012, which seems like an eternity ago. But if you look at the way this stock has traded on the weekly chart, doesn’t it look like this is a massive multi-year base? If this was a daily chart I would say, “We really need to buy this because it is a high momentum stock.” So take some Workday ( NYSE:WDAY ). And then hopefully, if the stock goes high enough then you will have fewer work days in your future and more rest days (I can’t believe I went there). Buy Workday ( NYSE:WDAY ).
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