Recent IPO Qlik Technologies: Growth to Build On

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 |  Includes: ARBA, CNQR, CRM, QLIK, SFSF
by: Joshua Hayes

The “Great Recession” has left many companies with fewer employees and large workloads. Productivity is the drive to get the work down, but how it gets down is where Qlik Technologies (NASDAQ:QLIK) comes into the picture.

Qlik’s business intelligence tool allows users to make real-time analysis simple. Users are able to explore data with ease and make decisions with confidence. More importantly the speed to implementation Qlik’s tool is measured in days rather than months, giving an immediate boost to worker productivity. In addition, Qlik can be installed on a mobile device, laptop, or in a cloud system and is available to a single user to a global organization. Making better and quicker decisions allows companies to apply savings right to its bottom line.

All new companies should display growth and Qlik certainly delivers. Prior quarter sales came in at 68% at 43.8 million. More importantly we need to see a string of growing sales figures and the prior three quarters have been at 48%. Big winning stocks normally display at least 25% growth quarter over quarter and Qlik has delivered.

Earnings are another important piece to the puzzle. Qlik’s prior earnings release showed a loss of a penny a share, but was better than the six cent loss year over year. A big beat from the prior year, but the prior three quarters of earnings growth has been stellar at 400%. This is the type of growth big winning stocks display prior to their monster runs.

The stock has just gone public and it will need to build more of earnings history as well as trading history. IPOs can often lead to awkward trading patterns, but if they can build proper accumulation, powerful runs will often turn up. Accumulation is when institutions scoop up shares and we can see this when volume rises above average. In addition, we can keep track of the number of funds owning the stock. The better the institutional sponsorship the better probability the stock moves higher.

Qlik Technology is a stock you should keep on your watch list and wait for a proper entry to get long as getting in too early may lead to you taking unnecessary losses.

Disclosure: No positions