XAutoplay: On | OffInternet stocks Alibaba (BABA), Amazon.com (AMZN) and JD.com (JD) may hold three of the top five rankings within the No. 9-ranked Retail-Internet industry group, but online postage service provider Stamps.com (STMP) comes in at No. 4 — and may be closing in on a new buy zone.
Like birds of a feather, stocks tend to move in groups, and internet-related stocks have been on the rise recently. Amazon, as well as Chinese companies Alibaba, JD.com and No. 7-ranked Baozun (BZUN), have all posted breakouts recently.
While microblogging platform Weibo (WB) is technically listed in the Internet-Content industry group, it also soared past a buy point as investors have shown particular demand for Chinese stocks.
Stamps.com may be based in southern California instead of Shanghai, but it is also riding that wave of institutional interest in internet stocks.
Top and bottom line growth has slowed recently, with Q1 EPS gains falling from 74% to a still impressive 62%. Revenue gains dropped from 52% to 28%.
But Stamps.com’s average gains over the last three years remains impressive for both earnings (80%) and sales (50%).
The company also sports a 48% return on equity and 46% annual pretax profit margin.
Will The Postman Ring Twice?
Stamps.com is working on a cup-shaped pattern as the second part of a first-stage base-on-base.
It began forming the current consolidation in February after clearing a 114.70 buy point and rising nearly 19%.
The stock sold off in heavy volume to form the left side of the new base, but has bounced back in even stronger trade over the last several weeks.
Stamps.com is now back above its 50-day line, and the 10-day moving average is also back above that key benchmark.
The stock was up nearly 5% Wednesday in rising volume that came in 96% above average, ending the day 3% below the potential 136.10 entry. The stock was up nearly 2% in early trade Thursday.
See if Stamps.com can follow in the footsteps of Alibaba and Amazon and deliver a strong breakout.