The stock market tanked today, Thursday May 5, 2022. The S&P 500 was down 3.6% on the day while the NASDAQ fell 5.0%.
The key to today was 94% of stocks on the NYSE had Downside Volume. Anything over 90% down is a sign of capitulation in the stock market. Now we wait on a +90% up day which could be a sign the market is ready to move higher.
Many high-growth names were down more than 10%, including these tech stocks:
- Bill.com (BILL) -13%
- MongoDB (MDB) -12%
- Cloudflare (NET) -14%
- Hubspot (HUBS) -13%
- Snowflake (SNOW) -11%
Bill.com reported earnings earlier, which were good from what I could see. The stock was getting hit because its price-to-sales multiple was high. The stock closed at $175 yesterday, which was 30x 2022 revenue estimates. Today it fell to $152 which is around 26x.
I like BILL and have been waiting for a lower “multiple” on the stock to buy in at. I will try to buy before the next Bull Market comes.
EPAM Systems Was the Shining Star
EPAM Systems stock was the shining star of the day, as the shares rose 11% to $346. EPAM is a technology consultant with more than half its staff in Ukraine, Belarus, and Russia. And with the Russia-Ukraine war bringing uncertainty to those in the area, EPAM stock had been getting slammed lower.
The company is working to relocate its staff to lower risk locations in Ukraine and surrounding countries, and has suspended work with customers in Russia.
Of EPAM’s long-term assets, 33% were in Ukraine, 32% in Belarus, and 7% in Russia.
In terms of regions, U.S. was 57% of EPAM’s 2021 revenue, with the U.K. at 13%, followed by Switzerland at 7%. The Netherlands and Russia were next at 4% of 2021 sales, as Germany and Canada were 3%.
Chart of the Day
Our chart of the day is this ten-year chart of EPAM as of March 16, 2022. Notice the stock hit a high of $700, then fell with the general decline of the stock market, then fell some more when Russia invaded Ukraine.
But the profit picture is improving, as EPAM delivered these qtrly stats:
- Reported: $2.49 vs. $1.81 = 37%
- Estimate: $2.08 vs. $1.81 = 15%
- Revenue: +50%
My take on this stock is if it gets back to $700 in a few years that would be a good return on our investment.
