This Company Is 'Shark' Bait... And the Power Gauge Loves It

The "sharks" are circling Salesforce (CRM)... Salesforce is known for its mega-suite of customer-relations management ("CRM") software. It lets customers do all sorts of things on their own... [Chaikin PowerFeed]( Editor's note: The markets and our Chaikin Analytics offices will be closed Monday, February 20, for Presidents Day. So we won't publish our Chaikin PowerFeed e-letter that day. Look for your next issue on Tuesday, February 21. This Company Is 'Shark' Bait... And the Power Gauge Loves It By Marc Gerstein, director of research, Chaikin Analytics The "sharks" are circling Salesforce (CRM)... Salesforce is known for its mega-suite of customer-relations management ("CRM") software. It lets customers do all sorts of things on their own... CRM software users can manage sales leads, customer accounts, approvals, marketing campaigns, and much more. And they can do it all with just a few clicks of the mouse. Salesforce also helped introduce the world to the idea of Software as a Service ("SaaS"). Without SaaS, we would all still need monstrous programs installed on our computers. But lately, Salesforce has been struggling... From 2013 to 2022, the company's annual sales averaged about 30% growth. But that growth slowed to 20% in the trailing 12 months. And it was only 10% in the latest quarter. Salesforce's operating margins and return on equity are getting weaker, too. The company is now laying off workers and buying back shares to cut costs. And as we'll discuss today, it's also getting attention from a few "sharks" – or activist investors... Recommended Links: ['SELL THIS DOOMED FAANG STOCK IMMEDIATELY']( Wall Street titan Marc Chaikin and world-renowned forensic accountant Joel Litman just delivered an urgent crisis warning... and shared a dead-simple playbook to take with your money right now to protect yourself. Plus, Marc reveals his No. 1 stock you should SELL immediately. It's a legendary FAANG stock that he says is headed for disaster. [Click here for details before today's opening bell](. [A Financial Fraud BIGGER Than FTX and Madoff?]( Man who called '08 crash reveals a financial fraud that could be BIGGER than FTX and Madoff combined... and could soon impact millions of Americans. [Click here for details](. In short, activist investor Starboard Value announced a stake in Salesforce on October 18. And then, Elliott Management revealed its presence on January 23. These activists are still fleshing out their plans. But to me, their interest is for one reason... It's about Platform as a Service ("PaaS"). SaaS involves finished software products that customers can use. Salesforce made a name for itself with its CRM software, which is a SaaS offering. PaaS is very different. It's about helping folks build things even if they don't know programming languages. Instead, they can use simpler, "low code" objects. In other words, given their acronyms, PaaS and SaaS might sound similar. But in reality, they serve different types of customers who want to do different things. Here at Chaikin Analytics, we use PaaS behind the scenes with the Power Gauge. Folks who use our SaaS-like platform see Power Gauge content that looks like this... [Chaikin PowerFeed] It's easy to understand. It's visually appealing. And it's a finished product that you can use. But behind the scenes, we make it all work with PaaS. For example, here's the low-code way to display one of our simplest items – the ratio of long-term debt to equity... [Chaikin PowerFeed] But that data alone doesn't make it a Power Gauge factor... From there, we need to attach another "concept" to calculate its rank. Then, we combine it with 19 other ranked factors to create the Power Gauge's overall grade. And finally, we use more complex steps to compute everything and send it over to our user-friendly platform. In recent years, Salesforce has spent a lot of money on PaaS-focused efforts... The company paid $6.5 billion to acquire MuleSoft in May 2018. A little more than a year later, it paid $15.7 billion for Tableau. And in July 2021, it bought Slack for $27.7 billion. That's nearly $50 billion overall. It's a worthwhile cause... but it's costly. Now, I can't say if the activist investors will make Salesforce spin off its PaaS. (I hope they do. I love PaaS and might invest in it as a separate company.) But at a minimum, I believe they will at least do something to improve management's investment and cost discipline. And Wall Street seems to agree... Salesforce's stock is up about 8% since Elliott, the second activist, got involved. The Power Gauge helps us see that the "smart money" is behind the company as well. Remember, our Chaikin Money Flow indicator tracks that. And it's firmly in the green zone. Even better, you can see in the screenshot above that the Power Gauge is "bullish" overall. The sharks are circling Salesforce. And they're pushing for much-needed changes. That bodes well for the company's long-term turnaround. Consider adding shares today. Good investing, Marc Gerstein Market View Major Indexes and Notable Sectors # Hld: Bullish Neutral Bearish Dow 30 -1.25% 9 18 3 S&P 500 -1.38% 174 259 67 Nasdaq -1.88% 38 50 12 Small Caps -0.95% 530 1024 338 Bonds -1.42% — According to the Chaikin Power Bar, Large Cap stocks and Small Cap stocks are Bullish.. Major indexes are mixed. * * * * Sector Tracker Sector movement over the last 5 days Utilities +2.05% Industrials +0.93% Energy +0.92% Staples +0.61% Materials +0.42% Discretionary +0.42% Information Technology +0.40% Financial +0.03% Communication -0.14% Health Care -0.31% Real Estate -0.57% * * * * Industry Focus Bank Services 36 52 10 Over the past 6 months, the Bank subsector (KBE) has underperformed the S&P 500 by -0.16%. However, its Power Bar ratio, which measures future potential, is Very Strong, with more Bullish than Bearish stocks. It is currently ranked #9 of 21 subsectors. Top Stocks [rating] UMBF UMB Financial Corpor [rating] JXN Jackson Financial In [rating] WAL Western Alliance Ban * * * * Top Movers Gainers [rating] WST +14.51% [rating] CSCO +5.24% [rating] ALB +4.70% [rating] CTLT +4.05% [rating] EQT +3.95% Losers [rating] OGN -15.00% [rating] SEDG -8.44% [rating] ETSY -8.40% [rating] ENPH -6.92% [rating] HSIC -6.57% * * * * Earnings Report Reporting Today Rating Before Open After Close DE DISH, PPL No earnings reporting today. Earnings Surprises [rating] PARA Paramount Global Q4 $0.08 Missed by $-0.15 [rating] CEG Constellation Energy Corporation Q4 $0.17 Missed by $-0.10 [rating] DDOG Datadog, Inc. Q4 $0.26 Beat by $0.07 [rating] HUBS HubSpot, Inc. Q4 $0.69 Beat by $0.18 [rating] WST West Pharmaceutical Services, Inc. Q4 $1.77 Beat by $0.39 * * * * You have received this e-mail as part of your subscription to PowerFeed. If you no longer want to receive e-mails from PowerFeed, [click here](. You’re receiving this e-mail at {EMAIL}. 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