Jim Roppel, a seasoned hedge fund manager who uses IBD founder Bill O’Neil’s investing methodology, joined us in studio for this week’s “Investing with IBD” podcast episode to discuss why he remains “exceedingly bullish” in the current stock market and how being an optimist makes him a successful trader. Plus, we analyze three top stocks for your watch list: Coupa Software (COUP), Dexcom (DXCM) and DocuSign (DOCU). DocuSign stock is in buy range after clearing an entry point following earnings last week.
Current Stock Market
With a plethora of top growth stocks gapping up and making big moves, Roppel says it’s “hard to be bearish” in the current stock market. For example, DocuSign stock has been on a run since gapping up on its September earnings report, while Dexcom stock surged after a gap-up on its November earnings report.
Roppel also says the heightened level of investor outflows while the market continues to hit highs means there’s still a lot of “fuel on the sidelines.” All that together makes him “exceedingly bullish” right now.
Make sure to listen to (or watch) the full episode above to get the most out of Roppel’s analysis not only of the current stock market, but why he says being an optimist is key to becoming a successful investor.
Why Optimists Are Successful Investors
Roppel credits his trading success in part to being an optimist. “You just have to have the ability to understand what the possible big picture is — what if it all goes right, what could that stock do?” That kind of thinking also carries over well beyond the stock market, he added.
But Roppel and IBD podcast host Irusha Peiris cautioned that there’s a difference between being optimistic and being overconfident. “Be an optimist, but also be prepared to cut those losses and be wrong,” Roppel warned.
DocuSign Stock Leads Top Stocks To Watch
Roppel and Peiris also analyzed three top growth stocks to watch: DocuSign stock, Coupa stock and Dexcom stock. Basic analysis and charts are below, but the full episode contains detailed insights on these potential trades. As always, these discussions are for informational and educational purposes only.
Coupa stock is working on a cup-with-handle base with a 155.87 buy point. Shares of the enterprise software stock have been moving sideways since July, but that was after a big run. And Coupa stock was able to find support at its 200-day line as it formed the bottom of the cup.
From a fundamental perspective, Coupa has posted strong earnings and sales growth, up 150% and 51% last quarter, respectively. Analysts see Coupa earnings growth of 100% in 2020, followed by another 31% gain in 2021.
Dexcom stock is pulling back after a steep run-up following its November quarterly earnings report. After the report, Dexcom stock surged 27%, gapping out of a base with a 178.55 buy point.
Dexcom makes continuous glucose monitoring systems for diabetes patients. Analysts expect full-year earnings growth of 283%, followed by 31% growth in 2020.
DocuSign stock has gained over 20% since breaking out of a six-month-long consolidation shortly after its September quarterly earnings report. Shares powered through an ascending base entry last week on its latest earnings report. DocuSign has pulled back but is still above the 69.99 entry.
Roppel notes that DocuSign stock is a great example of institutional accumulation.
DocuSign has been at the forefront of the transition to digital preparation and execution of documents. For the full year, analysts expect DocuSign earnings growth of 118%. DocuSign stock is projected to follow that with 71% earnings growth in 2021.
Finding Top Stocks To Watch And Buy
If you’re looking for the next top stocks primed to make big moves, check out IBD’s Stock Lists page. And to get IBD’s real-time assessment of leading names like DocuSign stock, check out IBD’s Stock Checkup page.
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Author: Alissa Coram