Conclusion, Investment Implications, Strategy
T. Rowe Price Group, Inc. (TROW) appears to be resuming its May 2020 major uptrend amid quarterly relative performance versus the benchmark S&P 500 (SPX). A sustained rise above the $145.96 area would help confirm to this and target an additional 17% rise to $180.00 per share. This is an Asbury Momentum trade idea.
Analysis and Rationale
T. Rowe Price Group, Inc. (TROW) is a publicly owned investment manager. The firm provides its services to individuals, institutional investors, retirement plans, financial intermediaries, and institutions. It launches and manages equity and fixed income mutual funds. The firm invests in the public equity and fixed income markets across the globe. It employs fundamental and quantitative analysis with a bottom-up approach. The firm utilizes in-house and external research to make its investments. It employs socially responsible investing with a focus on environmental, social, and governance issues. It makes investment in late-stage venture capital transactions and usually invests between $3 million and $5 million. The firm was previously known as T. Rowe Group, Inc. and T. Rowe Price Associates, Inc. T. Rowe Price Group, Inc. was founded in 1937 and is based in Baltimore, Maryland.
The upper panel of Chart 1 below plots TROW daily since July 2020 along with its 200- and 50-day moving averages, widely-watched major and minor trend proxies. The lower panel displays a corresponding daily relative performance chart of TROW versus the benchmark S&P 500 (SPX, blue) along with its 63-day moving average (green, quarterly, our Strategic time period).
The colored highlights in the upper panel show that TROW appears to be resuming its minor uptrend, as defined by its 50-day MA, while its current trend of quarterly relative outperformance versus SPX appears to be resuming. A sustained rise above the 50-day MA, currently at $145.96, would help to confirm this and target an additional 17% rise to $180.00 per share.
Table 1 below shows that considering the aforementioned upside target and a protective stop placed below the $145.82 area, a long entry price of $154.15 would provide a 1:3.1 risk/reward ratio (risking $1.00 to make $3.10) with an initial risk of 5.4%.
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Please consult the table showing our Asbury 6 key market metrics to help determine if this investment is suitable for you.