Trade Desk (TTD) is a name we’ve watched on and off for the past year, and now it’s shaping up a nice launching pad, and for good reason — its online advertising platform appears to be taking the industry by storm, observes Mike Cintolo, growth stock specialist and editor of Cabot Top Ten Trader.

The platform allows ad buyers to manage integrated campaigns across a range of channels (mobile, audio, social, display, connected TV).

The platform is targeted solely at buyers (usually ad agencies or other tech companies) and is heavily data-driven, giving real-time analytics and allowing clients to access Trade Desk’s unique data management platform to make better-informed buys.

As you can see in the table below, this “programmatic” approach to ad buying has taken off, and Trade Desk is growing at twice the rate of its competition.

Sales and earnings have boomed and crushed expectations in recent quarters (Trade Desk gets a platform fee from customers depending on their ad spend), and the future looks bright as more big advertisers sign up (Q3 saw them grab three of the top 200 global ad buyers).

And those clients stick around (95%-plus retention rate for 19 straight quarters) and buy more ads (of the top 200 brands that had come onboard by 2017, their ad spending on Trade Desk’s platform had grown five-fold from the prior year).

Big investors are certainly giving the firm a thumbs up, as the number of funds owning shares leapt from $281 in March to $425 in October. We’re big fans of this story.

TTD’s coming-out party came in May of this year, when the stock catapulted on giant volume for two straight weeks after earnings. The stock eventually soared as high as 162 before the market took it down 35% in the October/November wipeout.

But during that drop, TTD found support in the $105-$110 area for four straight weeks, and then surged back into the middle of its base last week. Shares could still need some time to consolidate, but we’re OK starting a small position here.

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