When it comes to investing in the stock market, we’re always on the hunt for that perfect stock.
Often, we’ll come across similar stocks in the same industry, that are estimated to do similarly well.
It can be tempting to just invest in the cheaper of the two stocks, mistakenly believing that decision automatically guarantees more money for you.
Luckily, I’m here to make sure you’re investing smartly, and pumping the most money possible into your wallet.
I do the hard work for you, so all you have to do is heed my advice and watch the money flow in.
Now if you don’t fully understand what I’m talking about, don’t worry.
I will explain everything and by the end of this, you’ll have a better understanding of what makes the best stocks…. well, the BEST.
In the pursuit of this, we’re going to take a look at two very similar stocks: Hortonworks, Inc. (HDP) and Systemax, Inc. (SYX).
These are the two most active stocks in the Technical and System Software industry, frequently competing with each other.
You don’t need to worry about what these companies do or any of the specifics of their business.
Take all of that extra noise and information and just toss it out.
All we need to concern ourselves with are the stock charts. They tell us everything we need to know.
Let’s begin by looking at the daily stock chart for SYX.
We see some pretty steady growth, accompanied by several instances of dipping down.
We can see that the growth is strongest after the stock stayed at around the same price for quite a while.
We don’t need to be concerned with why the stock shot up at the points it did, why it tumbled, or why it held steady for those lengths of time.
Those reasons really don’t matter to us, because all the information we need to know is given to us by the chart.
Now let’s take a look at the stock chart for HDP.
Now right off the bat we can tell that these charts look very similar.
What similarities do you notice?
How about any differences?
One of the most obvious differences is, of course, the price.
SYX is situated at least $10.00 higher than HDP.
Does that mean HDP is the better stock to invest in?
No, it does not.
At the end of the day a $10 difference is not nearly enough reason to choose a stock simply because it’s cheaper.
In fact, if you really look at the charts, you’ll see that SYX is the better option.
While HDP is cheaper, and the charts are remarkably similar, we see more consistency with SYX.
When predicting the future, consistency is crucial.
Although both charts show the stocks dipped below their 50-day Simple Moving Average (SMA), HDP dipped below more frequently and for longer periods of time.
SYX had better recovery and was able to pull itself back up quicker.
As an investor, that is a far more attractive characteristic than just being $10 cheaper.
When searching for the perfect stock, it can be easy to let yourself be distracted by price.
But if you can ignore that urge, and listen to my advice, I’ll make sure that you pick the BEST stock.
And that stock will have nothing to do with price, and everything to do with the massive PROFITS it can make you.
Because after all, the profits are what it’s all about.
