Sociedad Quimica Attracts Big Money

Sociedad Quimica y Minera de Chile S.A. (SQM) stock has soared this year, gaining 64.0% so far. And the Chilean producer of plant nutrients, iodine, lithium, and industrial chemicals could rise even more due to its low-cost position and current 2.4% dividend. But another likely reason is Big Money lifting the stock.

Big Money Likes Sociedad Quimica

So, what’s Big Money? Said simply, that’s when a stock goes up in price alongside chunky volumes. It’s indicative of institutions betting on the shares.

Smart money managers are always looking for the next hot stock. And Sociedad Quimica has many fundamental qualities that are attractive.

This sets up well for the stock going forward. But how the shares have been trading points to more upside. As I’ll show you, the Big Money has been consistent in the shares.

You see, fund managers are always looking to bet on the next outlier stocks…the best in class. They spend countless hours sizing up companies, reading reports, speaking to analysts…you name it. When they find a company firing on all cylinders, they pounce in a big way.

That’s why I’ve learned how critical it is to gauge Big Money demand for shares. To show you what I mean, have a look at all the Big Money signals SQM has made the last year.

The last few weeks have seen Big Money activity, too. Each green bar signals big trading volumes as the stock ramped in price:

Source: www.mapsignals.com

In the last year, the stock attracted 15 Big Money buy signals. Generally speaking, recent green bars could mean more upside is ahead.

Now, let’s check out technical action grabbing my attention:

• 1-month outperformance vs. Materials Select Sector SPDR ETF (+14.0% vs. XLB)

Outperformance is important for leading stocks.

Sociedad Quimica Fundamental Analysis

Next, it’s a good idea to check under the hood. Meaning, I want to make sure the fundamental story is strong too. As you can see, Sociedad Quimica has been growing sales and earnings at double-digit rates. Take a look:

• 1-year sales growth rate (+57.5%)
• 3-year EPS growth rate (+51.7%)

Source: FactSet

Marrying great fundamentals with technically superior stocks is a winning recipe over the long-term.

In fact, SQM has been a top-rated stock at my research firm, MAPsignals, for years. That means the stock has buy pressure, strong technicals, and growing fundamentals. We have a ranking process that showcases stocks like this on a weekly basis.

SQM has a lot of qualities that are attracting Big Money. It’s made this list 10 times since 2008, with its first appearance on 03/17/2008…and gaining 509.6% since. The blue bars below show the times that Sociedad Quimica was a top pick:

Source: www.mapsignals.com

It’s been a top stock in the materials sector according to the MAPsignals process. I wouldn’t be surprised if SQM makes additional appearances in the years to come. Let’s tie this all together.

Sociedad Quimica Price Prediction

The Sociedad Quimica rally could have further to go. Big Money buying in the shares is signaling to take notice. Shares could be positioned for further upside, and it currently pays a 2.4% dividend. Given the historical gains in share price and strong fundamentals, this stock could be worth a spot in a diversified portfolio.

Disclosure: the author holds no positions in SQM at the time of publication.

Learn more about the MAPsignals process here.

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