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07/02/2024 |

Expand Your Visual Analysis with Bubble Maps

We’ve said it before and we’ll say it again; If you’re trading or investing in the markets, it is imperative to be able to visualize data efficiently. Whether you want to see a bird’s eye view of real-time trends changing, identify key outliers, or drill down into dense data sets to make comparisons across indexes, sectors, or even your own unique watchlists, Bubble Maps are your way to the insights you’re after. Leg’s dig in.

This is the header image for the bubble maps blog.

With Bubble Maps, we take the metrics used to create Market Maps and vastly expand upon functionality and visualization. Key data points are plotted across a grid, allowing you to easily identify areas of interest and make quick visual comparisons across up to 5 unique watchlists. Additionally, to make visualizations more digestible, Bubble Maps come with a zoom function which allows you to pinpoint leaders, laggards, and outliers in any group.

How Bubble Maps Work

Let’s start with the basics. Bubble Maps can be found under the ‘Stock Market Map’ tab in the lower toolbar of your platform view.

This is an image of the stock market map tab in the lower toolbar.

Bubble Maps offer the flexibility to select from 15 price metrics and 42 fundamental metrics to define a bubble’s size and location on the map.

Supported Price Metrics

  • Change %, since close
  • Change $, since close
  • Change % vs 52 wk low
  • Change % vs 52 wk high
  • Week to Date Change
  • Week to Date % Change
  • 7 Calendar Days Change
  • 7 Calendar Days % Change
  • Month to Date Change
  • Month to Date % Change
  • 30 Calendar Days Change
  • 30 Calendar Days % Change
  • Year to Date Change
  • Year to Date % Change
  • Year Change
  • Year % Change

Supported Fundamental Metrics

  • Altman Z Score
  • Book to Market Value
  • Cash Return On Invested Capital
  • Cost of Revenue
  • Current Ratio
  • Earnings Per Share
  • Free Cash Flow
  • Gross Profit
  • Market Cap
  • Operating Margin
  • Price to Book Value
  • Price to Sales Ratio
  • Revenue
  • Total Debt
  • + 27 more 
Creating A Bubble Map

Creating a Bubble Map is simple, requiring just four parameters; The symbol list(s), the horizontal axis metric, the vertical axis metric, and the bubble size metric.

This image focuses on the bubble map menus, which allow you to select watchlsits and metrics to define each axis and the bubble size.
  • Symbol List(s): Choose from 700 pre-made lists, including index lists like the S&P Composite 1500, Nasdaq 100, Sector lists, or even your custom watch lists. Utilize up to 5 lists to compare distribution across varying indexes, sectors, or industries.
  • Horizontal axis metric: Define the fundamental or price change metric that determines a bubble’s placement on the horizontal axis.
  • Vertical axis metric: Specify the price change or fundamental metric that influences a bubble’s location on the vertical axis.
  • Bubble size metric: The size of a bubble is dictated by the price or fundamental data point of your choosing.
Zoom In For A Better View

You can click and drag anywhere on a Bubble Map to zoom into a specific area, providing you with a clearer view of the placement of a specific asset relative to its peers. When zoomed in, a ‘Reset Zoom’ button will appear in the upper right corner of your map.

Reading A Bubble Map

Bubble Maps utilize bubble size and location to convey insights. In the below map, we’re comparing price and fundamental metrics across five sectors; Energy, Major Banks, Technology, Consumer Staples, and Industrials.

This is an example bubble map containing various major sectors and highlighting price and fundamental metrics.
  • Horizontal Axis: This represents the percentage gain since the start of the year. To the far right are the largest gainers and to the far left are the names with the steepest drawdowns.
  • Vertical Axis: Distribution is defined by revenue, with the highest revenues at the top of the map and the lowest revenues at the bottom.
  • Bubble Size: Determined by market cap; The higher the market cap, the larger the bubble.
  • Bubble Color: Defined by sector. When visualizing multiple lists at once, a legend appears at the bottom of the map for easy discovery. Lists can be toggled on and off.

Bubble Maps In Action

A picture is worth a thousand words, so let’s dig into a few examples of how Bubble Maps can be utilized.

Valuation and Yearly Performance of Growth Stocks

Comparing the P/E ratios and yearly percentage change of the NASDAQ 100 helps investors identify over and undervalued stocks within the group and understand how market sentiment aligns with actual performance.

This is a bubble map used to identify valuation and yearly performance of the Nasdaq 100.
  1. Bottom Left (Negative P/E, Negative YTD % Change): TTWO, DLTR, and ILMN are all down on the year and incurring losses, making them the riskiest names in the group to own.
  2. Bottom Right (Positive P/E, Negative YTD % Change): While the market still expects future growth in MNST, ADBE, and TSLA, recent performance has not met expectations. This could indicate temporary challenges or overvaluation concerns.
  3. Top Left (Negative P/E, Positive YTD % Change): While MRNA is up on the year, it is currently unprofitable. Understanding the reason behind the losses, as well as the company’s future growth potential and financial stability are key insights to get clear on before an investment is made.
  4. Top Right (Positive P/E, Positive YTD % Change): Simply put, investors have high expectations for the future growth and profitability of companies like GOOG, MSFT, and AAPL, and the market is confident in their ability to meet or exceed those expectations.

Spotting Sector Rotation in Real Time

Sector rotation is the lifeblood of a bull market, and being able to visualize it quickly and efficiently is the key to enhancing returns and reducing risk.

This is a bubble map that can be used to identify sector rotation.
  1. Bottom Left (Negative Daily % Change, Negative 7-day % Change): Semiconductors have consumed all the attention this year due to their outsized returns, so to see them in the bottom left quadrant is a real change of pace.
  2. Bottom Right (Positive Daily % Change, Negative 7-day % Change): When a name appears within this area, it suggests short-term positive news amid a longer-term downward trend. These names are working today, but the overall sentiment around them is mixed.
  3. Top Left (Negative Daily % Change, Positive 7-day % Change): While the stocks in this area of the map have taken a hit today, they’re still in a longer-term upward trend. Perhaps today’s rout represents a buying opportunity.
  4. Top Right (Positive Daily % Change, Positive 7-day % Change): These are the sectors experiencing the strongest overall performance. Clearly, money is shifting from Semis to Energy, Financials, and Consumer Staples.

Identifying Trends Within Insider Buying

Understanding insider trading patterns can provide valuable insights into market sentiment and potential stock performance, and bubble maps can be used to highlight underlying fundamentals that could be driving those patterns.

This is a bubble map that visualizes trends within insider buying and selling.
  1. Bottom Left (Negative Book-to-Market Value, Negative YTD % Change): Stocks with negative equity and down on the year like DOMO and NINE should be hard avoids, and yet the insiders are buying. Time to look deeper.
  2. Bottom Right (Positive Book-to-Market Value, Negative YTD % Change): Insiders at BEN and PENN are likely buying shares because they’re trading at or near book value while underperforming on the year.
  3. Top Left (Negative Book-to-Market Value, Positive YTD % Change): When stocks are trading well up on the year despite negative book-to-market values, like DELL, it’s time to dig into additional fundamentals to understand the discrepancy there.
  4. Top Right (Positive Book-to-Market Value, Positive YTD % Change): Names that are trading at extended multiples of their book value that have seen the largest gains in price, like NVDA and LLY, are all seeing insider selling.

As with all updates, we hope you find these new Bubble Maps useful to your analysis. If you have any questions, feel free to reach out to us via the ‘Contact Us’ button in the bottom right corner of your platform view. We look forward to your feedback as you explore this new feature!