TrueCar Inc of Santa Monica California is a solid looking stock that’s in a strong uptrend. Institutional buy transactions have increased by 21% over the last 3 months. What do institutional investors like about this company?
TrueCar Inc Santa Monica CA
On May 9, 2017, TrueCar reported a Q1 EPS loss of -$0.01 versus the -$0.02 estimate. Revenue also beat rising 22.5% year-over-year to $75.8 million versus the $73.34 million estimate. Units were 217,656 in 1Q17, up 24% from 174,982 in 1Q16. Franchise dealer count was 11,734 as of March 31, 2017, a record and an increase from 11,151 as of December 31, 2016. Independent dealer count was 2,716 as of March 31, 2017, a record and an increase from 2,597 as of December 31, 2016.
The biggest risk I see with this company is if the car market completely crashes because of interest rate hikes. We know that auto sales have been coming down, while auto loan delinquencies have been rising.
I have mixed feelings about this stock and would prefer to trade it as a short term swing trade.
TrueCar, Inc. is a digital automotive marketplace dedicated to being the most transparent brand in the industry. TrueCar shows consumers what others paid for the car they want, so they can recognize a fair price. Users receive upfront pricing information when they connect with TrueCar Certified Dealers, allowing them to enjoy a more confident buying experience. TrueCar operates its own site and powers car-buying programs for over 500 companies, including some of the most trusted brands in the world such as USAA, AARP and American Express. TrueCar has a network of over 14,000 Certified Dealers and currently, over one third of all new car buyers engage with the TrueCar network during their purchasing process.
TrueCar Stock Chart
TRUE looks like a good entry on the chart with a candle over candle reversal off the 20 SMA. Prices have been consolidating lately and the volatility has been reduced. There is a little resistance above the current price. Another positive sign is the recent Pocket Pivot signal.
The Effective Volume suggests large institutional traders are accumulating the stock but again, anything having to do with the auto industry is dangerous as auto sales have plunged from Federal Reserve rate hikes.
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