by: VectorVest Inc.
There’s no shortage of speculation about TWTR, but what happens when you strip away the opinions & predictions?
You get the truth. And the truth can lead to big profits (or protect your capital so you can live to trade another day).
VectorVest’s Stock Analyzer tool removes the emotion by letting math-based indicators take over the tedious task of interpreting what the numbers have to say.
So, let’s take a look at what’s really going on with TWTR, starting with VALUE.
While TWTR has traded as high as $74.73 (December 26, 2013), its current Value, based on a combination of interest, inflation and earnings factors is $10.06. Compared to the August 22, 2016 close of $18.55, this means that TWTR’s stock is overvalued.
Does that mean you should stay away?
Remember, $10.06 is what TWTR is worth at this moment. Stocks with high growth rates or other promising aspects, like high safety or great dividends, often trade for a premium price. So, what’s needed next is an analysis of Twitter’s growth long-term outlook. VectorVest’s RELATIVE VALUE (RV) indicator takes care of that by measuring TWTR’s price appreciation potential over the next 1-3 years. (Careful not to dismiss if you are more interested in the short-term – high RV stocks make excellent short-term trades too!)
Relative Value for Twitter is 1.20 on the VectorVest indicator scale of 0.00 – 2.00 (anything above 1.00 is favorable), that means the prospects for TWTR trading higher over the next 1-3 years are good. It also means that TWTR’s numbers point to a 21% better potential ROI than you could expect from investing the same amount in a AAA corporate bond.
Good news! But don’t log in to trade just yet…
You also need to know if the potential return is high enough to warrant the risk.
That’s the job of Relative Safety (RS). The RS indicator is like a financial report card for a company. TWTR has an RS rating of 0.82. (Remember, above 1.00 is favorable on the VectorVest scale!)
Safety is poor for TWTR.
Not the best of news, but there’s still more that the VectorVest analysis has in store for you.
The ultimate trump card in our analysis is TIMING.
If you’ve ever bought a GREAT stock at the WRONG time, you’ve felt the pain it can cause first hand. In contrast, even the lousiest stock (umm… Enron, anyone?) can make an investor rich if they know when the time is right to buy and sell.
VectorVest believes that the time to buy a stock is when it’s already doing what you want it to do – that means rising in price – preferably in a rising industry and a rising market!
Talk about stacking the odds in your favor!
VectorVest’s Relative Timing indicator analyzes the price trend AND momentum for you. It analyzes all the dynamics of price, not just over 1-time frame, but four to let you know whether the stock is in an uptrend or downtrend and how fast it’s moving.
TWTR has an RT of 1.25 – Price is in an uptrend for the short-term and momentum is very good.
VectorVest’s RT Timing indicator often points out major reversals before they happen via bullish and bearish divergences. Looking at TWTR’s chart, you’ll see that even though the stock hit an all-time low on May 24, 2016, Relative Timing was showing a bullish divergence with a series of much higher lows.
VectorVest sums up both the fundamental (value and safety) and technical (price trend) indicators on Twitter using a single indicator – VST (that stands for Value, Safety & Timing). TWTR’s VST is 1.11 which is considered “good.”
(Pssst… This master indicator is genius when it comes to ranking dozens, or even thousands, of stocks from best to worst. For example, VectorVest’s top ranked stock in the Internet/E-Commerce industry is Boazun/BZUN with a Relative Value of 1.68, relative safety of 1.34, relative timing of 0.75 and a combined VST of 1.45.)
At the end of the day though, you really just want to know whether to buy, sell or hold, right?
Well, according to VectorVest’s rule-driven rating system, Twitter is currently a Buy due to its strong price trend and relatively adequate fundamental strength.
In closing, you should never buy a stock without a knowing when to sell. VectorVest calculates a stop-loss price for every stock, every day, and the stop for TWTR is currently set at $16.98.
Is TWTR right for your portfolio? Only you can make that call, but now you have the un-biased information to help you make the most profitable decision.
Get all this information and more in VectorVest’s Instant Stock Analysis Reports – Visit www.vectorvest.be/analyze to analyze ANY stock FREE.
VectorVest has been providing the highest quality investment research to investors for 28 years. The company’s comprehensive approach to investing combines the insight of fundamental valuation with the power of technical analysis in an easy-to-use stock analysis software package designed for all types of investors. VectorVest provides a Buy, Sell or Hold rating for over 23,000 stocks each day based on its proprietary Value, Safety and Timing system. The demand for its indicators and market timing information has prompted worldwide expansion. Today VectorVest analyzes markets in the U.S., Canada, Europe, U.K., Singapore, Australia, Hong Kong and South Africa.