For years, growth stocks have been beneficiaries of outsized gains compared to the averages. The main criteria we look for when betting on upside in a stock are improving fundamentals, great entry points (technicals) and a history of bullish trading activity in the shares.

The hallmark way we go about finding the best stocks – the outliers – is by looking for unusual trading activity. Oftentimes, that can be institutional activity … i.e. smart money. We'll go over what that unusual trading activity looks like in a bit. However, the five stocks we see as long-term growth candidates for April 2019 are Arista Networks, Inc. (ANET), Chipotle Mexican Grill, Inc. (CMG), NVIDIA Corporation (NVDA), PayPal Holdings, Inc. (PYPL) and Ulta Beauty, Inc. (ULTA).

For Mapsignals, we believe that the true tell on the near-term trajectory of a stock lies in the trading activity of the shares. 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 Arista Networks, Inc. (ANET), which is a leader in networking. The company has an outstanding software presence in automation, analytics, security and data centers. When we decide on the strongest candidate for long-term growth, we consider many technical areas important to success. A few of the areas in which Arista Networks stock has stood out year to date (YTD) are as follows:

  • YTD outperformance vs. market: +34.05% vs. SPDR S&P 500 ETF (SPY)
  • YTD outperformance vs. sector: +28.23% vs. Technology Select Sector SPDR ETF (XLK)
  • Recent bullish unusual trading signals

Just to show you graphically what our unusual trading activity signals look like, have a look at all of the buy signals created by our unusual institutional (UI) signals. Arista Networks has shown a strong chart over the past few years. Green bars are our highest-rated UI buys. It is clear that there is a lot of green going on with this stock. That's exactly what you want to see when looking for a great growth name.

Chart showing the top buy signals made by Arista Networks, Inc. (ANET)
www.mapsignals.com 

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

  • Q4 2018 year-over-year (YoY) revenue growth rate: +27.3%
  • Q4 2018 YoY non-GAAP net income growth rate: +32.7%

Next up is Chipotle Mexican Grill, Inc. (CMG), which is a top Mexican food chain. The company is known for great burritos and is a leader in the fast-casual dining space. 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 Chipotle are:

  • YTD outperformance vs. market: +46.55% vs. SPY
  • YTD outperformance vs. sector: +45.21% vs. Consumer Discretionary Select Sector SPDR ETF (XLY)
  • Recent bullish unusual trading signals

Below are the top buy signals Chipotle stock has made since 2018:

Chart showing the top buy signals made by Chipotle Mexican Grill, Inc. (CMG)
www.mapsignals.com

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

  • Q4 2018 YoY revenue growth rate: +10.4%
  • Q4 2018 YoY adjusted diluted EPS growth rate: +11%

Another growth name to consider is NVIDIA Corporation (NVDA), which is a global semiconductor leader. Some areas in which the company has a foothold are artificial intelligence, autonomous vehicles and robotics. When we decide on the strongest candidate for long-term growth, we want to see increasing volumes as the price gains. A few areas we like for NVIDIA stock are:

  • YTD outperformance vs. market: +19.64% vs. SPY
  • YTD outperformance vs. sector: +13.82 vs. XLK
  • Historical bullish unusual trading signals

Below are the top buy signals NVIDIA stock has made since 2016:

Chart showing the top buy signals made by NVIDIA Corporation (NVDA)
www.mapsignals.com

On top of a strong technical picture, one should also look under the hood to see if the fundamental picture supports a long-term investment. NVIDIA's growth rate has been slowing, but the company posted growth last year:

  • FY 2019 YoY revenue growth rate: +21%
  • FY 2019 YoY GAAP earnings per diluted share growth rate: +38%

Number four on the list is PayPal Holdings, Inc. (PYPL), which is a leading digital payments company. PayPal owns Venmo, which is gaining in popularity among younger demographics. When we decide on the strongest candidate for long-term growth, we consider many technical areas important to success. A few of PayPal's strengths include:

  • YTD outperformance vs. market: +9.69% vs. SPY
  • YTD outperformance vs. sector: +3.87% vs. XLK
  • Recent bullish unusual trading signals

Below are the top buy signals PayPal stock has made since 2016. Notice the consistent green bars:

Chart showing the top buy signals made by PayPal Holdings, Inc. (PYPL)
www.mapsignals.com

On top of the technical picture, one should also look under the hood to see if the fundamental picture supports a long-term investment. As you can see, PayPal has been growing nicely:

  • Q4 2018 YoY revenue growth rate: +13%
  • Q4 2018 YoY non-GAAP EPS growth rate: +26%

Our last growth candidate is Ulta Beauty, Inc. (ULTA), which is the leading U.S. beauty retailer. When we decide on the strongest candidate for long-term growth, we consider many technical areas important to success, with a few for Ulta Beauty being:

  • YTD outperformance vs. market: +27.07% vs. SPY
  • YTD outperformance vs. sector: +25.73% vs. XLY
  • Recent bullish unusual trading signals

Below are the top buy signals Ulta Beauty stock has made since 2018. You can see that this stock has been in a steady uptrend:

Chart showing the top buy signals made by Ulta Beauty, Inc. (ULTA)
www.mapsignals.com

On top of the technical picture, one should also look under the hood to see if the fundamental picture supports a long-term investment. As you can see, Ulta Beauty is showing growth:

  • Q4 2018 YoY net sales growth rate: +16.2%
  • Q4 2018 YoY diluted EPS growth rate: +6.2%

The Bottom Line

Arista Networks, Chipotle, NVIDIA, PayPal and Ulta Beauty represent potential buying opportunities for long-term investors. Given the strong historical revenue and earnings growth, along with multiple top-rated buy signals from unusual trading, 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 positions in Chipotle and PayPal shares at the time of publication. He holds no positions in Arista Networks, NVIDIA and Ulta Beauty.