Embrace the September Slump with This AI-Powered Pick

Let’s capitalize on the chaos during a notoriously bad month for stocks... [Derby City Daily logo]( [Derby City Daily logo]( September 6, 2024 [Embrace the September Slump with This AI-Powered Pick]( By Andy Swan Welcome to the September Slump. Historically speaking, the month of September is pretty awful for stocks (and bonds, for that matter). You can see the average monthly performance for the four main indexes below: the Dow Jones Industrial Average, S&P 500, Nasdaq Composite, and Russell 2000. [chart]( And true to its reputation, the S&P 500 fell more than 2% on Tuesday, kicking off a notoriously dour month of trading. What Is the September Slump? Some say traders are sad to return from summer vacations. Other say firms are taking profits ahead of end-of-the-year statements. Regardless of the motivation behind it, this seasonal trend should be top of mind for traders right now. We've already seen a significant pullback in [Nvidia (NVDA) post-earnings](. Today’s weaker-than-expected jobs report only fueled the volatility with 142,000 jobs added in August compared to the expected 165,000 (indicating fewer opportunities for job seekers as the labor market slows). In times of uncertainty, it's nice to have your research ready to roll to capitalize on any pullbacks. That’s why we put together a "September Slump Watchlist” for our MegaTrends subscribers this week, featuring some of our highest-conviction names bolstered by strong consumer sentiment and macro trends. [Paid-up members can access the full list here.]( But we couldn’t leave our Derby City Daily readers out of the fun. September doesn’t need to be a bummer when you have LikeFolio in your corner. So, let me give you a sneak peek at one of the names topping our September Slump Watchlist... SPONSORED AD [Prepare for Next Week’s Market Shock]( [image]( This coming Wednesday, September 11th, at 8 pm ET… Legendary tech trader Luke Lango is hosting a special strategy session called [The Great Tech Reversal of 2024. (Click here to see the details and save your seat.)]( He’ll help you prepare for a historic event that’s set to take place in mid-September. This event happened in 1995, 1998, and 2019. And in each of those occasions, it sent a small group of stocks skyrocketing higher. According to market-implied odds, there’s a 100% chance this event is happening again this month. [Save your seat.]( A Top Pick for the September Slump DocuSign (DOCU) was one of those companies that benefitted tremendously during the pandemic. As work went digital, more and more companies turned to its e-signature platform, and revenue growth accelerated significantly. So did DOCU’s stock price, cresting $300 a share in 2021. As the world went back to "business as usual,” that outsized growth slowed, and DOCU shares suffered (currently trading under $60 a share). [chart]( But macro trends are finally starting to tilt in DocuSign's favor once again. Mortgage loan applications rose 1.6% in the last week of August. Earlier in the month, refinancing rates surged 35% in a single week (+118% year over year) as interest rates hit the lowest level in over a year. Mortgage agreements aren't the only contracts DocuSign powers – its document management technology facilitates remote agreements across the board. This company has been on a multi-year journey to transition from an e-signature platform to [contract lifecycle management.]( And recent earnings have proved DocuSign can deliver business stabilization and improved profitability, driven by high retention rates for existing customers and strong international growth. AI: DOCU’s Next Major Growth Catalyst Some have questioned DocuSign’s artificial intelligence (AI) acquisitions, including its recent $165 million deal for the AI-powered contract management startup Lexion. We see this as a potential ace up its sleeve. DocuSign aims to integrate Lexion’s advanced AI capabilities into its own offerings, allowing businesses to automate workflows, extract critical information from contracts, and streamline contract reviews and negotiations. Lexion's technology, including tools like AI Contract Assist and a seamless Q&A experience, helps users quickly locate information in documents and suggests revisions based on AI-driven recommendations, which will significantly enhance the functionality of DocuSign’s Intelligent Agreement Management (IAM) platform. The company’s tools support various integrations, such as with Microsoft (MSFT) Word, Slack, and Salesforce (CRM), to simplify contract management tasks and provide a more comprehensive understanding of agreement data. With this acquisition, we believe DocuSign is positioned to offer even more robust AI-driven solutions that will help customers accelerate their business processes, reduce risk, and increase operational efficiency. LikeFolio Insights Reveal DOCU Gaining Momentum LikeFolio data suggests these AI-powered improvements are gaining momentum on Main Street. DocuSign web visits are up 6% year over year, a notable improvement from +3% YoY last quarter: [chart]( Better yet, we don't see signs of major traction from competing platforms. Dropbox Sign (DBX), Adobe Sign (ADBE), and other e-signature peers pale in comparison to DocuSign when it comes to mention volume and web visits. SPONSORED AD [The Biggest Financial Event of 2024?]( (Why 31 Billionaires Are Moving Their Stocks, Right Now) Should you buy, sell, or hold your stock? To find the answer, let’s look at the actions of the world’s wealthiest investors... Right now, the world’s wealthiest investors are preparing for what could become ‘the biggest financial event’ of 2024. [31 billionaires (including: Warren Buffett, Jeff Bezos, Elon Musk, and more) are MOVING their stocks as we speak...]( To discover where they’re moving their money... Why... And how you can profit alongside them... [Click here to find out]( The Bottom Line DOCU looks to be entering another major growth phase – this time, propelled by artificial intelligence. We’re betting this stock will power higher on its AI investments and improving market conditions. And any September pullbacks could present an attractive entry point for investors. So, yes, September is historically a terrible, horrible, no good, very bad month for stocks. And yes, the past five years have been especially bad for September trading, with stocks averaging a 4.2% drop in the month. But that doesn’t mean it’s time to sell and come back in October. It’s time to buck the consensus and buy stocks in September. Another major catalyst is working in the background that could make this September a standout month for investors – a unique economic event set to take place in about two weeks. In a special briefing [this coming Wednesday, September 11, at 8:00 p.m. ET]( my colleague Luke Lango will share everything you need to know about this rare economic dynamic – and hand you the ultimate game plan to potentially profit from it. Don’t run from the September volatility. Embrace it. [Reserve your seat to that briefing right now](. Until next time, [Andy Swan's signature] [Andy Swan's signature] Andy Swan Founder, LikeFolio Discover More Free Insights from Derby City Daily Here’s what you may have missed from Derby City Daily this week… ✓ [The Earnings “Cheat Code” That Helps You Beat the Street]( ✓ [Add This Compelling “Value” Play to Your Watchlist]( ✓ [What's Next for NVDA After Its Earnings Stumble?]( © 2024 TradeSmith, LLC t/a Derby City Insights. All Rights Reserved. 1125 N. Charles Street, Baltimore, MD 21201 To unsubscribe or change your email preferences, please [click here](. [Terms of Use]( | [Privacy Policy](