A gain of 14.37% in 2018 for shares of FleetCor Technologies, Inc. (FLT) was likely helped by bullish unusual trading activity in the stock. FleetCor Technologies shares have been performing very well this year, even after a solid 2017 return (+33.03%), and what makes this company interesting is that higher share volumes are accompanying the higher share price. These bullish signals preceded FleetCor being added to the S&P 500 Index on Wednesday, June 20, 2018.
With activity like that, it should come as no surprise that the stock has trended higher over that period. As the digital payments space gains in popularity, FleetCor's foothold on trucking fleet cards should continue to post solid growth for years to come. We have found that focusing our efforts in looking for companies with great fundamentals alongside bullish institutional activity can uncover great performing stocks.
In the view of Macro Analytics for Professionals (MAP), the strongest indicator of positive price momentum is obtained by measuring potential institutional accumulation. In 2018, FleetCor Technologies stock logged four of these rare signals, with the first bullish signal occurring on Jan. 2. This is on top of the six rare signals the stock fired off since July 2017. We want to see bullish activity in the shares alongside solid fundamentals, as this indicates that demand for the stock should increase.
In the chart below, FleetCor Technologies stock broke out to new highs accompanied by increasing accumulation. Shares should continue the upward trajectory:
MAP's process focuses on identifying companies with healthy fundamentals accompanied by outsized, unusual institutional activity to try and measure potential accumulation/distribution at the single-stock level. By studying these data points, we can hypothesize which equities institutions are trafficking in and marry this information with fundamentally sound companies. We want the odds on our side when looking for the highest-quality stocks.
When deciding on the strongest candidate for long-term growth, we consider many technical areas important to success. A few of these for FleetCor Technologies are:
- Year-to-date (YTD) outperformance vs. market: +10.82% vs. SPDR S&P 500 ETF (SPY)
- YTD outperformance vs. sector: +3.06% vs. Technology Select Sector SPDR ETF (XLK)
- Bullish potential accumulation signals
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, FleetCor Technologies has solid earnings and sales growth rates:
- One-year sales growth rate: +22.82%
- Three-year sales growth rate: +24.12%
- One-year earnings growth rate: +15%
FleetCor checks the box on strong technicals and fundamentals while showing bullish institutional momentum over the past year. We believe that the current level for the shares is in position for further upside. FleetCor Technologies shares have been powering higher this year, and with multiple unusual institutional activity signals, the stock could be setting up for an additional move to the upside. All of this points to further long-term bullish action for the stock.
The Bottom Line
FleetCor Technologies represents a potential buying opportunity for the long-term investor. Given the solid earnings growth, sales growth and multiple unusual accumulation signals, this stock could be worth a spot in a growth portfolio.
To learn more about MAP's institutional signals, please visit our "About Us" page.
Disclosure: The author holds a long position in FleetCor Technologies shares at the time of publication.