Institutions & Insiders Love TDC Stock
The current selling capitulation in the stock market reminds me of what happened in March 2020 when the COVID-19 pandemic locked down much of the world.
The fact that a staggering 83% of Nasdaq stocks are trading below their 50-day and 200-day moving averages isn’t justified. For investors who are patient and looking at the next five years, there are plenty of opportunities to pick up great stocks.
A sector with strong tailwinds is big data solutions, but like the rest of the technology stock market, it has been beaten down.
The demand for big data solutions will pick up, however. To play this, I like the prospects of mid-cap stock Teradata Corporation (NYSE:TDC).
Teradata provides a multi-cloud enterprise data warehouse that allows companies to analyze data and generate advanced insights. Teradata Corporation generates about $2.0 billion in annual revenues, along with being largely profitable and churning out free cash flow.
MarketsandMarkets estimates that the global big data market will jump to $273.4 billion by 2026. (Source: “Big Data Market by Component, Deployment Mode, Organization Size, Business Function (Finance, Marketing & Sales), Industry Vertical (BFSI, Manufacturing, Healthcare & Life Sciences) and Region – Global Forecast to 2026,” MarketsandMarkets, last accessed May 27, 2022.)
This should translate into opportunities for big data companies like Teradata Corporation.
Teradata Corporation’s Recent Stock Performance
At its current price, TDC stock is worth a look. As of this writing, Teradata stock is down by 39% from its high, which was set in October 2021, and down from its range low of $33.38, which was set on May 10.
Shares of Teradata Corporation trade around two times the company’s 2021 revenues, which is compelling for a technology growth stock in this market.
Teradata stock staged a strong breakout from a sideways channel in January 2021. That was followed by an upside trade gap and a spike to just below $60.00.
Since then, TDC stock has traded sideways between $40.00 and $60.00. The stock appears to be eyeing another test of its major support level around $30.00.
The emergence of a death cross pattern (when the 50-day moving average breaks below the 200-day moving average) in December 2021, which was followed by a downside trade gap, supports a potential downward move toward $30.00.
Chart courtesy of StockCharts.com
I would view Teradata stock at $30.00 per share as an opportunity. The risk is a move back to the stock’s previous channel resistance level of $25.00.
The current market overhang will likely put a cap on any sustainable gains from TDC stock, but once the macroeconomic situation settles down, I expect shares of Teradata Corporation to launch another upside break.
If Teradata stock can hold at $30.00 and the broader market sentiment improves, I could see TDC stock rally back to the range of $40.00 to $60.00, followed by a potential breakout.
You’ve got to like stocks that are found in the investment holdings of institutions. Teradata stock is a favorite of institutional investors. Currently, 508 institutions hold the majority of TDC stock. (Source: “Teradata Corporation (TDC),” Yahoo! Finance, last accessed May 27, 2022.)
Shares of Teradata Corporation have also consistently attracted net insider buying, which is a bullish sign. Over the last six months, insiders added a net 290,168 shares of Teradata stock to their portfolios.