The Trade Desk Sees Huge Money

The company reported earnings of 0.18 vs expected 0.15 per share. It also trounced revenue estimates of $283 million reporting $301 million.

It appears TTD is returning to growth-mode and it could be setting up for more gains as the advertising technology firm picks up profitable customers in an increasingly competitive industry. But another likely reason is due to Big Money lifting the stock. As you’ll see, this stock has been a Big Money favorite for the last few years and has exploded higher since.

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 The Trade Desk 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 all year.

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 TTD 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:

In 2021, the stock has attracted 6 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. Consumer Discretionary Select Sector SPDF Fund (+12.51% vs. XLY)

Outperformance is important for leading stocks.

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, The Trade Desk has been growing sales at a double-digit rate. Take a look:

• 3-year sales growth rate (+39.9%)
• 3-year earnings growth rate (+65.7%)

Source: FactSet

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

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

TTD has a lot of qualities that are attracting Big Money. And since 2016, it’s made this list 37 times, with its first appearance on 5/16/2017… and gaining 1,213.22% since. The blue bars below show the times that The Trade Desk was a top pick since 2016:

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

The Bottom Line

The Trade Desk rally could have further to go. Big money buying in the shares is signaling to take notice. Shares could be positioned for further upside. Given the historical gains in share price and strong fundamentals, this stock could be worth a spot in a growth-oriented portfolio.

Disclosure: the author holds no positions in TTD in personal or managed accounts at the time of publication.

Learn more about the MAPsignals process here.

Disclaimer