SNAP Is In My "Spotlight"
Social media app Snapchat ($SNAP) has been forming a beautiful base over the past four months and is starting to look like it may be ready to get moving again. The popular platform allows users to send photos and messages to others that will disappear after being viewed. In addition, they have also introduced a new feature called "spotlight" which is aimed at driving up user-created content to rival TikTok.
I've been watching SNAP closely since its' enormous gap up in October 2020. While it is impossible to be in every stock, it's good to take note of what is trending in case another entry point presents itself. SNAP has been consolidating quite well for most of this year, and I particularly like the tight, quiet action it has been experiencing the last few weeks.
The other thing that I really love about SNAP is that funds seem to like it just as much as teens do. The number of funds owning Snapchat has increased in all of its' last four quarters. This makes sense since large, liquid leaders often are a great place for growth managers to invest their funds. Although the concept of Snapchat may seem silly, clearly something is working since SNAP has produced four quarters of accelerating sales. In addition, insiders still own over 10% of the shares, indicating they still believe the best days are ahead. If SNAP can divert some traffic away from TikTok and to its' platform, that could yield huge returns and send the stock to much higher levels.
I currently own a small position in SNAP, but I will be keeping a "spotlight" on it in the coming days and weeks for another buy point with the intention of adding on a full position. I believe SNAP has the potential to be a true market leader in 2021 especially if the "spotlight" feature gains popularity this summer.
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Full Disclosure: I currently own SNAP.
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