ASUR - Asure Software (NASDAQ: ASUR) Flashing Bullish Technicals Alongside Existing Solid Fundamentals As Small-Caps Appear Poised For a Resurgence
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Despite the quickestinterest rate hiking cycle in modern U.S. history, the associatedfallout amongst regional banks that led to some of the largest U.S.bank failures since the 2008 Great Recession, and overall bearishnarratives, the Nasdaq and S&P 500 are firmly in bull marketterritory since hitting their lows in October 2022.
On a year-to-datebasis, the Nasdaq has rallied over 25% and the S&P 500 is up over11%. The Dow Jones has yet to join the bullish festivities with a YTDreturn of just over 1.50%. Driving this market outperformance has largely been mega-cap technology stocks, as the artificialintelligence boom takes hold. In addition, the recentmassively-bullish jobs report and the conclusion of the debt ceilingdebacle have only helped further the idea that a "softlanding" could be back on the table.
Small-Cap Stocks Appear Ripe For a Rebound
Another bullish signfor the markets is the resurgence of small-capstocks in recent weeks. The small-cap-focused Russell 2000 indexsurged after the impressive and unexpected May nonfarm payroll data pointed to a resilient job market. Being that small-caps are heavilysensitive to domestic economic data, many experts are seeing this asthe beginning of a small-cap resurgence into the second half of2023.
For onereason, the spread between the Nasdaq 100 and the Russell 2000 indexperformance is near the highest levels in history. Greg Czarnecki, aportfolio specialist at WilliamBlair , noted that small-cap valuations are currently trading at asteep discount compared to their long-term averages and large-caps.Mr. Czarnecki noted that small caps had previously priced in a severeeconomic slowdown. With underlying strength holding up well in theU.S. economy, small-caps could be poised for a re-pricing to reflectthose recent revelations.
One small-cap tech stock that appears positioned tobe a benefactor of a smaller stock resurgence is Asure Software, Inc.(NASDAQ: ASUR).
ASUR: Bullish MACDCrossover Points to a Potential Rally Resumption
Asure Software, thefull-service human capital management (HCM) services provider tosmall-medium-sized businesses (SMBs), witnessed an incredible rallyfrom late 2022 into April 2023. The massive 150%+ rally during thatperiod was backed by impressive fundamentals, as seen from the strongtop and bottom-line growth particularly in their Q3 2022, Q4 2022, FY2022, and Q1 2023 financial results.
In addition, the HCM provider inked notablepartnerships at the beginning of 2023 with Intuit’s TurboTax,H&R Block, Zayzoon, and others. This provided further evidence toshareholders and the investment community at-large that Asure Softwarecontinues to be a rising power growth company, which was able toattract attention from household brands, such as those namedabove.
However,given the large price appreciation through those six months, it wasonly natural that ASUR shares saw a bit of profit-taking. The ASURchart shows a bearish MACD crossover occurred in late April 2023,which effectively signaled the beginning of the pullback. After amonth of catching its breath, the price action in ASUR has not onlystabilized but now shows signs of a resuming rally shortly.
The stock chart shows asuccessful MACD bullish crossover occurred on June6, 2023, after the share price found hard support around the $11.50area. Coincidently, the relative strength index (RSI) has alsoconfirmed the recent rebound, climbing from just-above oversold levelsat 30 to its current reading of 48. The RSI had previously reachedseverely overbought territory in mid-April just before the pullback.This shows evidence that the recent month's trading action hasbeen nothing more than a healthy pullback, as opposed to a fullsentiment change.
Bullish: AsureSoftware Selected Into Preliminary Reconstituted Russell 3000Index
AsureSoftware recently announced a major milestone effectively validatingthe company’s impressive continued growth. On May 22 nd ,the HCM company announced that it has been added to the preliminaryreconstituted Russell3000 Index. The official inclusion into the index will take placeupon market close on June 23, 2023, as a part of the 2022 Russellindexes reconstitution.
FTSE Russell determines membership into indexes by taking the4,000 largest U.S. stocks and ranking them based on their total marketcap. Companies that have been selected to be included in its indexesare valid for one year and are automatically eligible to be includedin FTSE Russell's various other growth- and value-style indexes,as well as the Russell 1000 Index or the small-cap-focused Russell2000 Index.
TheRussell indexes are extremely important benchmarks within theinvestment world. Around $12 trillion worth of assets are benchmarkedagainst FTSE Russell U.S. indexes, making the FTSE Russell a leadingglobal index provider.
"Our inclusion in the Russell 3000 Index further validatesour strategy. Investors are seeing the impact of our investments intechnology, Sales and Marketing, and the AsureMarketplace, and theirconfidence shows up in our market capitalization. It's an excitingtime to be at Asure,” stated Pat Goepel, the CEO and Chairman ofAsure.
Conclusion
In conclusion, despitea turbulent interest rate cycle and considerable bank failures, theNasdaq and S&P 500 have shown strong performance with a promisingyear-to-date rally, largely driven by booming artificial intelligencetechnologies and significant recovery of small-cap stocks. Thisuptrend has been marked by promising domestic economic data,suggesting a potential for a "soft landing" for themarkets.
In thiscontext, Asure Software, Inc. stands out as a potential beneficiary ofthe resurgence in small-cap stocks, having showcased strong growthbacked by robust fundamentals and a bullish technical setup. Therecent inclusion of Asure Software in the preliminary reconstitutedRussell 3000 Index further attests to its steady ascent and growingrecognition in the investment community. Thus, with the underlyingresilience of the U.S. economy and promising indicators from marketindexes, the stage seems set for continued bullish activity, withcompanies like Asure potentially leading the charge in the foreseeablefuture.
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