Tyler Tech (TYL)

Worth a look…

This Forbes ‘Most Innovative’ Growth Stock Remains Near Buy Point

Forbes’ list of “Most Innovative Growth Companies 2016” ranks stocks like Tyler Technologies (TYL) by their innovation premium – defined as the difference between their market capitalization and the net present value of cash flow.

Plano, Texas-based Tyler ranked No. 24, joined by IBD 50 member Aspen Technology (AZPN) (No. 14) and Lululemon Athletica (LULU) (No. 33).

Institutional Demand

Tyler Technologies provides software to help local governments reduce costs while still meeting statutory obligations related to taxes and appraisals, courts and justice, and public safety.

Attracted by a 25.3% pretax profit margin and solid three-year annual growth rates for earnings (29%) and sales (20%), mutual fund managers have taken an interest, with Fidelity Contrafund (FCNTX) and three other typically better-performing funds reporting a position.

Tyler’s 1.6 Up/Down Volume Ratio, B Accumulation/Distribution Rating and a rise in fund ownership last quarter confirm demand.

Reset Button

Tyler Technologies broke out in October 2014, rising 88% before pulling back sharply at the beginning of this year.

The silver lining of that decline was how the stock reset its base count, potentially paving the way for a fresh run.

Tyler cleared a first-stage cup-with-handle entry in late June, but pulled back to form its current consolidation – a flat base as part of a first-stage base-on-base pattern.

Tight trading along the 10-week moving average within the base points to support for the stock.

Composite Rating 98 Pass
EPS Rating 98 Pass
RS Rating 77 Pass
Group RS Rating A- Pass
SMR Rating A Pass
Acc/Dis Rating B+ Pass

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