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Growth Is Back, Baby! Right? Right??? (Cestrian Stocks Bulletin #21)

Growth Is Back, Baby! Right? Right??? (Cestrian Stocks Bulletin #21)
By Cestrian Capital Research, Inc • Issue #21 • View online
Predictably enough, money is now flowing back into growth names. A tentative recovery has begun. But earnings are about to test the mettle of the growth fightback.

DISCLAIMER: This note is intended for US recipients only and, in particular, is not directed at, nor intended to be relied upon by any UK recipients. Any information or analysis in this note is not an offer to sell or the solicitation of an offer to buy any securities. Nothing in this note is intended to be investment advice and nor should it be relied upon to make investment decisions. Cestrian Capital Research, Inc., its employees, agents or affiliates, including the author of this note, or related persons, may have a position in any stocks, security, or financial instrument referenced in this note. Any opinions, analyses, or probabilities expressed in this note are those of the author as of the note’s date of publication and are subject to change without notice. Companies referenced in this note or their employees or affiliates may be customers of Cestrian Capital Research, Inc. Cestrian Capital Research, Inc. values both its independence and transparency and does not believe that this presents a material potential conflict of interest or impacts the content of its research or publications.
ZScaler, First Over The Top
Don’t look now, but a tentative rotation back into growth names has begun. If you look at the charts for most all the big tech names - your Microsofts, your Amazons, your Nvidias - they all show the same thing, which is, coiling for another run up. Smaller, hotter, higher-octane stocks too. One of our favorites, Cloudflare ($NET), is showing remarkable price potential as we highlighted for Cestrian Fundamentals subscribers yesterday. The new cloud generation, that cohort of relatively young names each building discrete parts of Internet 3.0 fabric, were hit very hard in the recent correction. With the putative recovery just days old, the first of this cohort to pit bears against bulls is ZScaler, which reports its Q1 earnings (for the quarter ending 30 April 2021) after the close today.
ZS is a business with superb fundamentals and we would be surprised if the story changes in this set of numbers. If the numbers are sound, how the market treats the stock over the next 2-3 days following the print will tell us a lot about the fragility or otherwise of the rotation back to growth. We cover the stock in our various research services and have written about it in our free work too. Here’s our note from September last year.
Cestrian Capital Research, Inc
Cestrian Capital Research, Inc
Today we posted an idea on how to play ZS in our “idea of the day” service, Cestrian Elements; and right after the bell we’ll be covering ZS earnings blow by blow in our premium real-time service, Cestrian Fundamentals - including live blogging the earnings call, interpreting the numbers and the stock movements as they happen.
If you want to quietly chart the recovery, we suggest watching how ZS moves for the rest of the week. We think it will be instructive.
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Cestrian Capital Research, Inc - 25 May 2021
DISCLOSURE: Cestrian Capital Research, Inc staff personal account(s) hold long position(s) in AMZN, MSFT, NET, NVDA, ZS.
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