For years, growth stocks have been beneficiaries of outsized gains compared with the averages. The main criteria we look for when betting on upside in a stock are improving fundamentals, leading technicals and bullish trading activity in the shares. The five stocks we see as long-term candidates are Microsoft Corporation (MSFT), The Trade Desk, Inc. (TTD), Xilinx, Inc. (XLNX), Planet Fitness, Inc. (PLNT) and Domino's Pizza, Inc. (DPZ).

For Mapsignals, we believe that the true tell on the near-term trajectory of the stock lies in the trading activity. The bottom line here is that the manner in which a stock trades can oftentimes alert you to the forward fundamental picture more so than by simply looking at a company's financials alone. We want the odds on our side when looking for the highest-quality stocks.

Up first is Microsoft, which is the dominant software and PC player. Notably, it also owns the popular and fast-growing cloud computing business Azure.

In the chart below, Microsoft stock is now back above its 50-day moving average:

Technical chart showing the performance of Microsoft Corporation (MSFT) stock

When we decide on the strongest candidate for long-term growth, we consider many technical areas important to success. A few of these factors for Microsoft are as follows:

  • Year-to-date (YTD) outperformance vs. market: +28.03% vs. SPDR S&P 500 ETF (SPY)
  • YTD outperformance vs. sector: +25.49% vs.Technology Select Sector SPDR ETF (XLK)
  • Bullish unusual trading signals

Just to show you graphically what our unusual trading activity signal looks like, have a look at all of the unusual institutional (UI) signals Microsoft stock has made over the past year. Green bars are UI buys, and red bars are UI sells. It appears that the red bars are in the rear-view mirror:

Chart showing UI signals made by Microsoft Corporation (MSFT) stock
Source: www.mapsignals.com.

On top of a great technical picture, one should also look under the hood to see if the fundamental picture supports a long-term investment. As you can see, Microsoft has a solid fundamental history:

  • Q1 2019 year-over-year (YoY) net income growth rate: +34%
  • Q1 2019 YoY revenue growth rate: +19%
  • Dividends have increased each year since 2005

Next up is Trade Desk, which is an advertising company. It offers a platform for buyers of advertising.

In the chart below, Trade Desk stock is breaking above its 50-day moving average:

Technical chart showing the performance of The Trade Desk, Inc. (TTD) stock

When we decide on the strongest candidate for long-term growth, we consider many technical areas important to success. A few of these factors for Trade Desk are as follows:

  • YTD outperformance vs. market: +188.81% vs. SPY
  • YTD outperformance vs. sector: +186.27% vs. XLK
  • Bullish unusual trading signals

Below are the UI signals made by Trade Desk stock over the past year:

Chart showing UI signals made by The Trade Desk, Inc. (TTD) stock
Source: www.mapsignals.com.

On top of a great technical picture, one should also look under the hood to see if the fundamental picture supports a long-term investment. As you can see, Trade Desk has solid fundamentals:

  • Q3 2018 YoY net income growth rate: +99%
  • Q3 2018 YoY revenue growth rate: +50%
  • Increased full-year 2018 revenue guidance

Another growth name to consider is Xilinx, which is a semiconductor company. The firm is also making a push into 5G.

In the chart below, Xilinx stock is trading at 52-week highs:

Technical chart showing the performance of Xilinx, Inc. (XLNX) stock

When we decide on the strongest candidate for long-term growth, we consider many technical areas important to success. A few of these factors for Xilinx are as follows:

  • YTD outperformance vs. market: +33.44% vs. SPY
  • YTD outperformance vs. sector: +30.9% vs. XLK
  • Bullish unusual trading signals

Below are the UI signals made by Xilinx stock over the past year:

Chart showing UI signals made by Xilinx, Inc. (XLNX) stock
Source: www.mapsignals.com.

On top of a great technical picture, one should also look under the hood to see if the fundamental picture supports a long-term investment. As you can see, Xilinx has solid fundamentals:

  • Q2 2019 YoY net income growth rate: +24%
  • Q2 2019 YoY revenue growth rate: +19%
  • Increased full-year 2019 guidance

Number four on the list is Planet Fitness, which operates fitness centers.

In the chart below, Planet Fitness stock is near its 52-week high:

Technical chart showing the performance of Planet Fitness, Inc. (PLNT) stock

When we decide on the strongest candidate for long-term growth, we consider many technical areas important to success. A few of these factors for Plant Fitness are as follows:

  • YTD outperformance vs. market: +68.68% vs. SPY
  • YTD outperformance vs. sector: +63.75% vs. Consumer Discretionary Select Sector SPDR ETF (XLY)
  • Bullish unusual trading signals

Below are the UI signals Planet Fitness stock has made over the past year:

Chart showing the UI signals made by Planet Fitness, Inc. (PLNT) stock
Source: www.mapsignals.com.

On top of a great technical picture, one should also look under the hood to see if the fundamental picture supports a long-term investment. As you can see, Planet Fitness is growing rapidly:

  • Q3 2018 YoY revenue growth rate: +40.2%
  • Q3 2018 YoY net income growth rate: +14.37%
  • Q3 2018 raises full-year outlook

Our last growth candidate is Domino's Pizza, which operates pizza delivery chains globally.

In the chart below, Domino's Pizza stock is trading above its 50-day moving average after the pullback:

Technical chart showing the performance of Domino's Pizza, Inc. (DPZ) stock

When we decide on the strongest candidate for long-term growth, we consider many technical areas important to success. A few of these factors for Domino's Pizza are as follows:

  • YTD outperformance vs. market: +43.9% vs. SPY
  • YTD outperformance vs. sector: +38.97% vs. XLY
  • Bullish unusual trading signals

Below are the UI signals Domino's Pizza stock has made over the past year:

Chart showing UI signals made by Domino's Pizza, Inc. (DPZ) stock
Source: www.mapsignals.com.

On top of a great technical picture, one should also look under the hood to see if the fundamental picture supports a long-term investment. As you can see, Domino's Pizza is growing rapidly:

  • Q3 2018 YoY global retail sales growth rate: +8.3%
  • Q3 2018 YoY diluted EPS growth rate: +65.3%

The Bottom Line

Microsoft, Trade Desk, Xilinx, Planet Fitness and Domino's Pizza represent a potential buying opportunity for the long-term investor. Given the solid revenue growth, earnings growth and multiple unusual buying signals, these stocks could be worth a spot in a growth-oriented portfolio.

To learn more about Mapsignals’ institutional signals, please visit our "About Us" page.

Disclosure: The author holds a long-term position in Microsoft shares and no positions in Trade Desk, Xilinx, Planet Fitness and Domino's Pizza at the time of publication.