Monthly Specials (December 2024)
Two new stock ideas selected through a blend of fundamental analysis and technical setups
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Hello, reader!
Welcome back to the blog, and thank you for joining me for this December edition of the Monthly Specials! (If you missed November’s two-part series, you can find them here.)
Each month, I highlight stock ideas—whether for swing trades or long-term investments—focusing on growth and quality companies that have caught my attention. Picks are based on a blend of qualitative insights, fundamentals, and/or technical setups.
November brought a wave of technical breakouts following the U.S. election. While many stocks are starting to look a bit overextended, there are still opportunities across selected industries, particularly in SaaS, Semiconductors equipment, Healthcare and Fintech.
For December, two stocks stand out—one for its fundamentals and technical setup as it comes back from the bottom after a huge sell-off back in August 2023, and the other one for its technical setup and exceptional growth and disruptive potential.
Let’s dive in!
📰 What’s new?
Several articles (most are FREE to read):
Brief Deep Dives: ⛅ Cloudflare, 👷♂️ Parsons, 𓇲 MPS, 🥼 Medpace
🎅 Christmas Special: TOP 5 Picks for 2025
💸 General Investing Articles
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Deep Dive Brief: 🔌Arista Networks
Summaries of several earnings and conference calls for Q1 earnings season
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💸 Adyen (ADYEN)
Technical Setup
Adyen’s stock collapsed in August 2023 following its H1 2023 earnings release, as the business revealed slowing sales growth and compressing earnings. This drop took the stock to levels not seen since before the pandemic. However, over time, this has created a very interesting technical setup, as explained below 👇
Inverse Head and Shoulders (Weekly Timeframe):
The left shoulder formed after the end of 2021, establishing a key support level in the $1200 range.
The head of the pattern was created during the 2023 collapse, where the stock bottomed out at a long-term support level around $600.
The right shoulder is currently forming just above the key $1200 support zone.
Smaller Inverse Head and Shoulders (Highlighted in purple):
A smaller inverse head and shoulders pattern has also emerged over the past few months, adding another layer of bullish potential.
MACD Momentum:
The MACD line is gaining momentum above the zero line and points to a potential bullish reversal.
Volume Dynamics:
Selling volume has steadily declined, with dips being consistently bought on spiking volume—a positive indicator of accumulating demand.
Adyen’s stock is building a solid multi-year base, supported by the inverse head and shoulders pattern, while fundamentals have been gradually recovering since the H1 2023 pullback.
Fundamentals: Why Adyen Stands Out?
There’s a lot to like about Adyen as it continues to carve out a significant niche in the global payments landscape. Here are the key reasons:
Simplifying Payment Complexity: Adyen addresses the headaches of managing multiple local payment providers by offering seamless payment routing, lowering merchant costs, and boosting authorization rates.
Capital Efficiency: Its capital-light model helps to achieve sustainable growth, on Adyen’s CEO words: “We aim to maintain a sustainable capital expenditure level up to 5% of our net revenue”
Scalable Growth: Targeting net revenue growth in the low-to-high 20% range annually through 2026, demonstrating its ability to scale fast.
Margin Strength: With inherent operating leverage, the company aims to achieve EBITDA margins above 50% by 2026. This is industry-leading profitability.
Solid Balance Sheet: Adyen remains net cash-positive with minimal debt, providing both stability and flexibility for reinvestment.
Market Share Upside: Operating in a highly fragmented market, Adyen is just getting started, with significant runway to expand its market share:
"We are still the minority player across our customer base on average... There is a lot of volume for us to still win in our existing base. The business will be much bigger in the years ahead than it is today. And in doing that, we want to be sure that we have the right flexibility to invest where we can accelerate growth." — CEO comments, H1 2024 Conference Call, on the vast untapped volume within the company’s existing customer base
Price will Catch Up to Fundamentals
Since the revenue growth slowdown from the Covid-era bubble in 2021—declining from the mid-40% range to the low-20% range by H1 2023—Adyen's growth has stabilized around the mid-20% level. Meanwhile, EPS growth has maintained an impressive +33% CAGR over the past four years, even as the stock price remains stuck.
They say, “technicals follow fundamentals.” Well, Adyen might just be a prime example of what could happen… soon.
🔐 SentinelOne (S)
Technical Setup
Since the Covid-era collapse, the stock has been consolidating in a broad range between the low $10s and low $30s, forming a multi-year Stage 1 base. While fundamentals are far from being attractive aside from high revenue growth, recent developments—such as CrowdStrike's outage and rumors of SentinelOne gaining market share—have pushed the stock toward the upper end of its range 👇
Rising Wedge (Daily Timeframe):
The stock has crawled up steadily since the ER in June, forming a rising wedge nearing the $30 resistance, the upper limit of its Stage 1 base.
Although their latest ER in August did not give the stock the boost that some expected, the market is waiting patiently for SentinelOne to confirm they are effectively gaining market share.
MACD Tightening up:
The MACD line is tightening above the zero line, signaling some indecision as the market awaits clarity from next earnings report.
Volume Dynamics:
Volume has declined as the stock nears resistance, also reflecting hesitation and anticipation of key news.
🧠 Thoughts
This is arguably one of the riskier ideas featured in my Monthly Specials so far. However, the technical setup looks primed for a potential breakout from the Stage 1 base. If it does, the stock will have a lot of room to go higher.
The uncertainty still remains and SentinelOne must demonstrate sustained +20% revenue growth, faster bottom-line improvement, and, crucially, tangible market share gains from CrowdStrike in the enterprise space —where its competitor is king— to justify a breakout.
Next earnings on Wednesday, December 4 will be key for the stock’s direction, and for those with conviction —who dare to enter the trade before ER— SentinelOne is setting up perfectly for a swing.
That’s a wrap for this first edition of “Monthly Specials” for December, I hope you enjoyed it, and we’ll keep an eye out for more 🧠 setups and promising opportunities soon.
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