From a technical perspective, Salesforce.com (NYSE:CRM) is looking strong, says Jeff Parent, portfolio manager with Castlemoore Inc.
San Francisco-based Salesforce has seen its share price steadily rising over the past ten years, going from $7.00 (all figures in US dollars unless noted) in 2008 all the way up to a high of $128.00 last month. But the stock has seen a noticeable dip since, causing some to wonder what the future holds for the company.
No worries, says Parent, who claims that the stock is looking like a Buy.
“From a fundamental perspective, I’m getting a lot of good signals,” says Parent, in conversation with BNN, “from an asset growth, earnings momentum and a few others. It also has very strong relative performance compared to just about every other stock out there. It’s making money on the year rather than losing money, which is unusual, and it’s holding above the 200-day moving average, so I think this is a buy right now.”
“We can probably see by the fall maybe a breakout above that $128.00 level, which was the recent high we saw in March,” says Parent. “This is a stock that because of its size, [the recent] dip here has had a lot of volume, a lot of buyers coming in. So you’re going to get some panic sellers, some people taking profits on the downturn.”
“But there’s a lot of buying going on, as well, so that turnover is positive. I’d probably apply a 100-day moving average and use that as my stop on this,” says Parent.
The CRM software company withstood the wider selloff in the market in February where the S&P 500 fell almost nine per cent from its 52-week high in January, but the tech sector’s troubles in March impacted salesforce.com.
Last month, Salesforce announced that it had signed an agreement to acquire integration software company MuleSoft for $6.5 billion. “Every digital transformation starts and ends with the customer,” said Salesforce CEO Mark Benioff. “Together, Salesforce and MuleSoft will enable customers to connect all the information throughout their enterprise across all public and private clouds and data sources- radically enhancing innovation. I am thrilled to welcome MuleSoft to the Salesforce Ohana.”