MANH Stock Price: Exploit the Bearish Trend Over Manhattan Associates

motek 1The article was written by Motek Moyen Research Seeking Alpha’s #1 Writer on Long Ideas and #2 in Technology  – Senior Analyst at I Know First

MANH Stock Price


  • Based on Stochastic analysis Manhattan Associates’ beaten down stock is approaching Oversold territory.
  • MANH is now a bargain and it is ripe for bottom fishing. It is also an ideal takeover target from a bigger software company like Oracle, SAP, and IBM.
  • Manhattan Associates continue to survive and flourish as an independent software company. It is a leader in custom software for supply chain management.
  • MANH has clear bearish technical indicators that bodes further decline for the stock. Waiting a little longer might give you a cheaper entry point.
  • Contrary to bearish technical indicators, I Know First’s Artificial Intelligence-powered stock picking algorithm gives very positive near and long-term market trend forecasts for MANH.

Manhattan Associates (MANH) just flashed a buy signal in my book. Using Stochastic Oscillator as a technical indicator, MANH is approaching Oversold territory. I like using Stochastic to determine entry/exit points on stocks I like. MANH’s Stochastic reading of 22.89 is a signal to buy this application software company’s downtrodden stock. Manhattan Associates is now a bargain after it lost more than 25% of its value over the past 12 months.

(Source: StockTA)


Manhattan Associates has been slightly missing quarterly revenue estimates but beating EPS predictions for the past three quarters. Investors have accordingly punished its stock. MANH’s YTD negative return is now almost -20%. I’d like to thank bears for making this software company more affordable.



Because of a year-long downtrend (MANH is almost 30% down from its 52-week high), MANH is now ripe for bottom fishing. The long-term prosperity of this software company is not facing any serious headwinds. MANH is involved in a low capital intensity business of designing/supplying supply chain management software for companies. Manhattan Associates has also been consistently profitable and its free cash flow constantly grew over the past ten years.



Value-minded technology sector investors should therefore exploit the negative stock trend of MANH over the past year. Manhattan Associates Price/Sales and P/E ratios are now below its Application Software industry peers.

(Source: Capital Cube)


Betting On A Leader On The Cheap Is Wise

The persistent bearish sentiment over MANH is unwarranted. This company remains a leader in supply chain software. For many years now, Gartner keeps honoring Manhattan Associates as the king of Warehouse Management Systems. In spite of competition from mega-caps like Oracle (ORCL) and SAP (SAP), Manhattan Associates remains the runaway leader in its chosen niche, Warehouse Management Systems (WMS). Being a leader where giant software companies are involved already makes MANH interesting as a long-term investment.

The Warehouse Management System market was worth $1.32 billion last year. It is projected to reach $3.23 billion by 2023, giving this niche market a CAGR of 14.1%. This projection bodes well for MANH’s future. Supply chain software is its core business. It is always good to invest in companies involved in a growing industry sector.

Being the acknowledged leader in Warehouse Management Systems has helped Manhattan Associates consistently deliver positive year-over-year growth in both revenue and income.


Manhattan Associates, like other profitable software companies who are leader in their chosen field, touts impressive gross margins and net margin efficiency. MANH has consistently delivered annual gross margin higher than 54% and net margin higher than 18%. Such display of constant high margins is prima facie evidence of MANH’s business moat.

(Source: Capital Cube)


The consistency of MANH’s profitability and strong cash flow has allowed the management to do annual share buybacks over the last decade.  A company that can afford to do buybacks assured me that the management is confident enough about MANH’s future. They do not see any serious headwinds ahead that can impair MANH’s growth and profitability. The bearish cloud over MANH is probably letting the management do more buybacks at low prices.


Well-Diversified Business

Warehouse Management Systems is just one of the businesses where MANH is involved. It actually offers a diversified portfolio of software solutions that cater to the omni-channel and inventory logistics needs of small and large corporations. I am always appreciate of a software company that is not a one-trick pony.

(Source: Manhattan Associates)



I am very tempted to go long MANH. I will probably have to sell some AMZN, AAPL, and INTC to finance going long on Manhattan Associates this month. I like the fundamentals of MANH. I appreciate its lower valuation right now. However, other technical indicators signal a continuing bearish trend for MANH. I might wait for a cheaper entry point before going long MANH.


(Source: StockTA)


I am also bullish on MANH because my natural intelligence told me that its lower valuation exposed it as a potential takeover target. Oracle, IBM (IBM), and SAP would love to own an industry leader like Manhattan Associates. Even BlackBerry (BBRY) can probably afford to buy MANH right now. Manhattan Associates’ current $3.01 billion valuation makes it really an easy acquisition target for any software company with $1.5 billion or more cash on hand.

MANH has positive near, intermediate, and long-term algorithmic market trend forecasts from I Know First. This position contradicts the overall bearish technical trend signal. However, I trust I Know First’s forecasts more than the trend signals of technical indicators.



I Know First Algorithm Heatmap Explanation

The sign of the signal tells in which direction the asset price is expected to go (positive = to go up = Long, negative = to drop = Short position), the signal strength is related to the magnitude of the expected return and is used for ranking purposes of the investment opportunities.

Predictability is the actual fitness function being optimized every day, and can be simplified explained as the correlation based quality measure of the signal. This is a unique indicator of the I Know First algorithm. This allows users to separate and focus on the most predictable assets according to the algorithm. Ranging between -1 and 1, one should focus on predictability levels significantly above 0 in order to fill confident about/trust the signal.

ntdoy stock outlook

AMD Stock Outlook