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05/21/2024 |

Identify Outliers & Opportunities With Market Maps

The financial markets are a constant battle for attention. With so many stocks to trade, it can be difficult to know which names offer the best opportunity at a given time, so traders leverage tools such as watchlists, smart checklists, and scanners to swiftly identify the key data points they’re interested in.

Visual graphs like heatmaps are another widely utilized tool with which traders and investors can gauge the current state of a correlated group of stocks. There’s just one problem; common heatmaps have significant limitations in the depth and range of information they provide. We are excited to introduce our solution to this challenge: Market Maps!

Title graphic that shows a market heatmap faded behind a dark background with the text "Market Maps: Customizable Heatmaps" Written on the front.

Market Maps, built to be an advanced visual discovery tool, have the potential to transform the way you discern anomalies across distinct universes of symbols, providing unmatched insights into market trends and performance metrics. Let’s dig into the details!

How Market Maps Work

Traditionally, tile size and color in common market heatmaps represent market capitalization and daily percentage changes. TrendSpider’s Market Maps elevate this experience by offering the flexibility to select from 15 price metrics and 42 fundamental metrics, allowing you to customize your analysis to meet your specific requirements.

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
  • EBITDA
  • Free Cash Flow
  • Gross Profit
  • Market Cap
  • Operating Margin
  • Price to Book Value
  • Price to Sales Ratio
  • Revenue
  • Total Debt
  • + 27 more

Setting Up Your Map

Creating a Market Map is simple, requiring just three parameters:

Stock market maps menu screen, with editable dropdowns
  • Watchlist: Choose from 700 pre-made lists, including index lists like the S&P 500 or your own custom watch lists.
  • Tile Size: Define the fundamental or price change metric that determines tile size.
  • Tile Color: Specify the price change or fundamental metric that influences tile color.

Reading Market Maps

Market Maps utilize a color spectrum to convey insights.

Same heatmap with Blue, Red, Grey and Green boxes highlighted
  • Blue: Represents values typical for a given universe of symbols, falling between the 45th and 55th percentiles. Think of this color as a ‘median’ value.
  • Green: Signifies values that are better than the median, tailored to the metric you’ve selected. The brighter the green, the better the metric.
  • Red: Indicates values worse than the median. The brighter the red, the worse the metric.
  • Gray: Used for ambiguous data points where it’s challenging to determine whether the value is good or bad.

Example Maps

When you open your Stock Market Map tool, you’ll see nine sample market maps that we’ve created to help get you started. To create your own maps, like the ones below, utilize the ‘Custom Map’ selection.

Heatmap menu screen showing 8 sample maps + custom options

Nasdaq 100 Revenue & Net Profit Margin

  • Watchlist: Nasdaq 100
  • Tile Size: Revenue
  • Tile Color: Net Profit Margin

This map shows us the relationship between how much a company sells and how much money they keep.

Heatmap of Nasdaq 100 Revenue & Net Profit Margin

Key Insights:

  • AMZN has the most revenue but thin margins, taking home only 7.3%. COST is similar, with huge revenue but small margins.
  • AAPL, META, MSFT, and GOOG highlight the sheer size and scale of the business. With large margins, they keep a lot of what they make, and they make a lot.
  • NVDA is the 3rd largest company in the world but is lacking revenue. The secret is in the margins, where they keep $0.55 on every dollar of sales. That’s 7.6x more than AMZN! In essence, it takes AMZN $7.60 in revenue to make the same as NVDA makes on $1.00 in revenue.
  • PANW has the highest margins of the group, coming in at a whopping 88%.

Russell 2000 Month-to-Date Change & Week-to-Date Change

  • Watchlist: Russell 2000
  • Tile Size: Month-to-Date Change
  • Tile Color: Week-to-Date Change

Market maps can be used as an alternative way to visualize the top movers in a specific group. Keep your eyes on the upper left corner because these names have been putting in numbers lately.

Heatmap of Russell 2000 Month-to-Date Change & Week-to-Date Change

Key Insights:

  • While EBS has cooled off a little this week, it’s still leading the monthly charge; up a whopping 121%.
  • NVAX and INOD are no slouches, either, both scoring huge gains this week and pushing toward the top of the leaderboard.
  • You know it’s a bull market when the worst-performing name, MODV, in a group can be down 9% in a week and still up 11% on the month.

S&P 100 Gross Profit & Price To Earnings Ratio

  • Watchlist: S&P 100
  • Tile Size: Gross Profit
  • Tile Color: Price To Earnings

Using gross profit and the price-to-earnings ratio, you can immediately find the most profitable companies and how much you pay as a shareholder to buy that profit.

S&P 100 Gross Profit & Price To Earnings Ratio

Key Insights:

  • It costs $26 to buy $1 of profit at GOOG, which isn’t too shabby considering the S&P currently trades at 27x earnings.
  • Trading at 61x earings, AMZN is the most expensive big tech company due to its thin margins.
  • Telecom companies like T, VZ, and CMCSA trade very cheaply, as do energy names like CVX and XOM.
  • Tobacco giant, MO, offers some of the cheapest profits money can buy but as the industry dies, do the profits ultimately dry up, as well?

If you want to take this analysis a step deeper, drill down! We know that Energy names are cheap, so try switching the watchlist to ‘Energy’ and you’ll find while XOM was the cheapest name in the S&P 100, it appears on the pricey side when compared to its peers.

Energy Sector Heatmap sorted by Gross Profit

S&P 100 Total Debt

  • Watchlist: S&P 100
  • Tile Size: Total Debt
  • Tile Color: Total Debt

Pro tip, by selecting the same metrics for both variables, you can create a linear chart to quickly understand the distribution across a specific price change or fundamental data point.

S&P 500 Total Debt heatmap

Key Insights:

  • The average total debt for names within the S&P 100 ranges between $32B and $38B, with a nearly equal amount of names coming in above and below those levels.
  • JPM leads the group with a whopping $442.2B in debt, with every other major bank hot on its heels.

Ready to unlock new insights into market performance? Dive into Market Maps today and discover a world of trading opportunities at your fingertips. If you have any questions, feel free to reach out to our support team via the ‘Contact Us’ button in the bottom right corner of your platform view!