You’re likely to have used their websites to improve things in your life. Now it’s time to improve your wallet and buy internet stocks Pinterest (NYSE:PINS), Stitch Fix (NASDAQ:SFIX) and Etsy.com (NASDAQ:ETSY). That could possibly get you in on the next, next big thing on Wall Street. Let me explain.
Most days in the internet space, it’s all about tech giants Amazon (NASDAQ:AMZN), Facebook (NASDAQ:FB) or maybe Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL). And with U.S. authorities now trying to crack down on those massive companies’ business practices, that’s even more true today. But it would be a mistake to see those internet stocks as the end all, be all.
The fact is, while shopping on Amazon, socializing on Facebook or watching Alphabet’s YouTube or searching Google are increasingly important to most people these days, internet stock up-and-comers PINS, SFIX and ETSY are making their own impact on consumers.
And if you’ve ever thought what it might be like to own the next, next big thing, the price charts and recent earnings reports suggest now is the time to consider investing in these three. Here’s why.
Internet Stocks to Buy: Pinterest (PINS)
Recent IPO PINS stock is the first of our three internet stocks to buy. Pinterest is a wildly popular visual discovery platform which collects and shares ideas and activities to empower and improve its users’ own experiences.
Admittedly, the company’s first earnings report as a publicly traded company didn’t go over so well. Shares plunged nearly 13.5% following the report. But I believe Wall Street is being near-sighted.
Pressure on shares tied to concerns over wider-than-forecast, but improving, losses trumped this internet stock’s better-than-expected revenue growth of more than 52% year-over-year, and Pinterest’s slightly above-views range guidance for its full-year outlook.
After roughly a month to digest the report, PINS stock is trading back inside of the post-earnings reaction after a challenge of its all-time lows. As shares of this internet stock have also formed a small uptrend off the deep correction, there’s reason to see this rally as having legs without being exposed to unnecessary risk.
Buy Recommendation: Buy PINS stock through $27.50 with an initial stop-loss below $25.75.
Our next internet stock to buy is ETSY. The company operates a commerce platform for businesses and individuals to make, sell and buy goods on and offline. An earnings beat and in-line, double-digit sales growth took a backseat to a wrongful death lawsuit after a baby suffocated while wearing a necklace purchased on Etsy.
We still don’t know the verdict on the case, but investors have passed judgment already. Technically, ETSY stock is sporting a very friendly looking price chart for bulls.
On the weekly time frame, shares of this internet stock are forming a corrective cup pattern after successfully testing an irregular base-on-base formation. And as that price consolidation developed on top of a breakout from a massive deep base — momentum traders aren’t likely to experience any buyer’s remorse.
Buy Recommendation: Buy ETSY stock above this week’s high of $71.80. I’d suggest an initial stop-loss below $67. This minimizes losses and avoids potential pattern failure within the right side of the cup base.
Internet Stocks to Buy: Stitchfix (SFIX)
The last of our three internet stocks to buy is SFIX stock. It has been less than two weeks since Stitch Fix, an online personal styling service, knocked earnings and sales out of the ballpark. And as InvestorPlace’s Dana Blankenhorn dutifully noted, the report all but proved the bullish narrative. The company’s business model is working.
What’s also hard at work are shares of this internet stock, as the price action tries to piece together the bull case for investors.
Since SFIX stock’s initial gap reaction, shares have been in a holding pattern, consolidating slightly above levels where it sat exactly one year ago. With the small congestion also forming with the support of the 200-day simple moving average, a momentum entry looks like the way to position in Stitch Fix.
Buy Recommendation: Buy SFIX stock above the pattern high of $30.54. I’d set my sights on $35 as a spot for initial profit-taking. That’s within the prior earnings report’s volatile price action. And relative to a blended stop beneath $27, it also looks like good business off and on the price chart.
Investment accounts under Christopher Tyler’s management do not currently own positions in any securities mentioned in this article. The information offered is based upon Christopher Tyler’s observations and strictly intended for educational purposes only; the use of which is the responsibility of the individual. . For additional market insights and related musings, follow Chris on Twitter @Options_CAT and StockTwits.
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