Investors looking for companies with growth that can transcend a global economic slowdown should look no further than business analytics provider Alteryx Inc. (AYX) , Jim Cramer told viewers of his "Mad Money" program Tuesday. This stock is up 128% so far in 2019 and has given shareholders a 760% return since its 2017 debut.
The Alteryx story is simple, Cramer said. Companies are generating more data than ever before from more sources than ever before. Alteryx helps them prepare and organize that data for analysis, something that used to take teams of people to do.
Alteryx not only is seeing strong revenue growth, but it also is experiencing the holy grail on Wall Street, accelerating revenue growth. Add to that performance the recent acquisitions in the space, such as Salesforce.com (CRM) snapping up Tableau Software (DATA) , and it's easy to see why investors are valuing shares at 17x sales. But for as attractive as Alteryx is, Cramer said 17x sales is simply too high. That's why he recommended investors add Alteryx to their shopping list for the next marketwide selloff.
Let's check out the charts and indicators of AYX to see if there are any clues as to where and when to buy this stock.
In this daily bar chart of AYX, below, we can see a parabolic-like rise in prices from October. Prices are above the rising 50-day moving average line and the rising 200-day line. Tests of the 50-day line have proved to be buying opportunities since November, but prices are now looking extended versus the 200-day line.
The On-Balance-Volume (OBV) line shows a rise from March to July, but recent weeks show some weakness in the OBV line. In the lower panel of this first chart we show the 12-day price momentum study, which has a high in June and a lower high this month despite prices making a higher high. This is a bearish divergence and can sometimes foreshadow a correction.
In this weekly bar chart of AYX, below, we can see a more dramatic rise in price from early 2017. Yes, prices trend and this an example of a stock that everyone would love to own. Prices are above the rising 40-week moving average line. The weekly OBV line has made new highs for the move up to confirm the price action and price momentum has not slowed yet.
In this Point and Figure chart of AYX, below, we can see a potential upside price target around $160. A trade at $127.44 is needed to start to weaken this chart.
Bottom line strategy: While the weekly chart and the Point and Figure chart look strong, the daily bar chart is starting to show some weakness. Consequently, buyers could remain patient and consider the $100 area as a potential purchase area, perhaps in the month of October when I anticipate the broad market could bottom.