Shift4 (FOUR) Moves To Buy
Three days does not make a trend in any way, shape or form. But, rejuvenated by a stalling/pullback in yields, growth stock bulls have pulled themselves up off the mat and appear ready to defend their turf – at least for now.
Among the stocks I like best now are those that show growth traits AND exposure to an economic reopening. Shift4 (FOUR) fits the bill.
The provider of integrated payment processing and technology solutions generates 60% of payment volume from restaurants and the hospitality sector – two of the worst hit during the pandemic. This alone may be enough to sell the story. But I’ll add that FOUR has been relatively strong during the market’s recent gyrations (a little dip below the 50-day line didn’t set off the alarm bells), lockup expiration passed uneventfully in December, and a secondary offering priced at 55.5 around the same time did nothing to slow FOUR’s ascent. The stock now trades near 83.
Finally, this morning Bank of America has given Shift4 the old double upgrade, moving from “Underperform” to “Buy”. While analysts are far from perfect and this alone isn’t reason to mortgage the house to buy FOUR, it’s another signal to those on the fence that it’s worth taking a swing. If we miss, we’ll blame Bank of America (I’m joking).
Bottom line: FOUR is moving back to buy today. I’d prefer to see buying under 85 so if this market rips higher today, be patient. On the flip side, we are almost certain to see some significant down days in the coming weeks in growth stocks (though anything is possible) and FOUR could easily revisit the 50-day line near 75. I’d be a buyer down to 70. If it goes lower than that we would want to reassess. BUY