We first wrote about Interpublic (NYSE:IPG) in March 2018. The stock had just reached $26 a share, but we thought an Elliott Wave correction can “easily erase about 50% of Interpublic ’s market capitalization.”
Two years later, during the coronavirus panic in March 2020, IPG fell to $11.63, down 55% from the 2018 high.
Fortunately, the company was financially sound and its survival was never in doubt. According to the Elliott Wave theory, once a correction is over, the larger trend resumes. So after successfully sidestepping the crash, it was time to take another look. On May 13, 2020, we published an update containing the following chart.
The weekly chart above revealed a complete 5-3 wave cycle. The five-wave impulse that unfolded between 2008 and 2018 was followed by a simple A-B-C zigzag. As always, we left the attempts of picking the bottom to people braver than us.
Interpublic Shows Investors Don’t Have to Pick Bottoms to Do Well
At $16.13, however, there was still plenty of upside potential. Initial targets above the top of wave 5 at $26.01 were plausible. The pandemic was in full swing and marketing budgets are often the first thing companies look into when cutting costs in a crisis. Despite that gloomy outlook, the chart above suggested it was time to invest in a marketing company. How things turned out is visible on the next chart.
The Fed made things really weird this past year. The record amount of money printing and liquidity caused market moves that would normally take years to develop in months. By February 2021, Interpublic was already trading above its 2018 top. Yesterday, the stock closed at $29.93, up 157% from the 2020 low.
At $32.26 the stock would have doubled in price since the time we turned bullish on it. Given the current upside momentum, we have little doubt it is going to reach that level and then some. In the meantime, Omnicom, another advertising company we examined in May 2020, has yet to reach its 2016 peak…