Sometimes it’s the low-key stocks that make a portfolio.
“In March 2020, I begged Xerox XRX to buy DocuSign when the company was [instead] going after HPQ,” Collins wrote recently on RealMoney. “Xerox was ready to pay up to $35 billion for HPQ. The market cap for DOCU at the time hovered around $15 billion. In fact, I thought either HPQ or XRX should find a way to buy DOCU. Fast forward 18 months. HPQ's market cap sits at $32 billion. XRX hovers around $3.75 billion. And DocuSign? $53.5 billion! You screwed up, XRX and HPQ.”
Still, DocuSign has had a rough few weeks, there’s no question about that. After a jump following its latest earnings report at the beginning of September, shares reversed and have trended lower. However the company’s recent fluctuations come on the heels of several months of solid growth. For Collins, he sees a stock ready to make a solid comeback.
“While DocuSign has struggled the past few weeks, it may be ready to turn here. The stock has been moving lower via a falling wedge pattern. Today's action (as of Sept. 15) may be the first sign of life bulls have seen for quite some time. The stock bounced off the support line of the wedge, creating the setup for a hammer pattern.”
DocuSign is the kind of solid, behind the scenes company that makes up the majority of the stock market. Companies and government agencies alike have adopted their technology, making this a firm that seems solid on both the technicals and the fundamentals.
“I do realize hindsight is 20/20, but changing how legacy companies think may be the biggest challenge for that group. They can't get out of their own way or think forward. Sometimes simply trying to survive will do that to you… Keep an eye on DOCU. Even if XRX and HPQ missed it to buy, you don't have to.”