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1 Stock To Buy, 1 To Dump When Markets Open: MongoDB, Nio

By Investing.com (Jesse Cohen/Investing.com)Stock MarketsDec 06, 2020 08:25AM ET
www.investing.com/analysis/1-stock-to-buy-1-to-dump-when-markets-open-mongodb-nio-200546971
1 Stock To Buy, 1 To Dump When Markets Open: MongoDB, Nio
By Investing.com (Jesse Cohen/Investing.com)   |  Dec 06, 2020 08:25AM ET
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Stocks closed at new record levels on Friday. Ongoing optimism over the COVID-19 vaccine's progress and expectations for further stimulus drove Friday's rally in U.S. indexes.

The Dow and S&P 500 posted a second consecutive week of gains, climbing 1% and 1.7% for the week, respectively. The tech-heavy NASDAQ added 2.1% over the same time frame, its third straight week closing in green.  

Dow Jones, S&P 500, NASDAQ Daily Chart
Dow Jones, S&P 500, NASDAQ Daily Chart

Fresh vaccine developments and updates about coronavirus infection rates and social-distancing restrictions will remain in focus in the days ahead.

Below we break down one stock that should see a pop with earnings ahead and another on track for additional losses as delisting fears weigh.

Stock To Buy: MongoDB

MongoDB (NASDAQ:MDB), the most widely used open-source database software platform, is thriving this year. 

The New York-headquartered company has seen demand for its cloud-based data platform soar as more people work from home.

MongoDB's website details the wide reach of its product, saying:

"MongoDB has more than 20,200 customers in over 100 countries. The MongoDB database platform has been downloaded over 125 million times and there have been more than one million MongoDB University registrations."

Shares more than doubled in 2020, jumping 111%, outpacing the benchmark S&P 500’s 14.5% gain over the same timeframe

MDB stock closed at $277.63 on Friday, not far from an all-time high of $289.79 reached on Nov. 30, valuing the database software company at roughly $16.1 billion.

MongoDB Daily Chart
MongoDB Daily Chart

MDB's earnings and revenue easily beat expectations in the second quarter. The company is expected to next report its financial results on Tuesday, Dec. 8 after the close.

Consensus estimates call for the database software specialist to post a loss of $0.45 per share in the third quarter, widening from a loss of $0.26 per share in the same period a year earlier. Revenue, meanwhile, is projected to jump almost 27% year-over-year to a record $138.8 million, thanks to robust subscription demand for its Atlas cloud-based database.

As such, Wall Street will be closely monitoring revenue growth rates for the Atlas platform, which jumped 66% year-over-year in the preceding quarter. The offering now accounts for more than 44% of companywide sales.

Beyond EPS and revenue figures, market players will also focus on MongoDB’s update regarding its outlook for the rest of the year and beyond, given the unprecedented nature of the ongoing COVID-19 pandemic.

We expect that MongoDB, which has regularly surpassed Wall Street estimates since going public in October 2017, will post another impressive quarter as its cloud-based, open-source database offering remains in demand.

Stock To Dump: Nio

Investors may want to stay away from Chinese electric vehicle maker Nio (NYSE:NIO) this week as they await further developments after the U.S. House of Representatives passed a bill that could result in China-based companies delisting their shares from U.S. exchanges.

Under the ‘Holding Foreign Companies Accountable Act,’ which was passed in the House last week, China-based companies listed on U.S. exchanges would have to undergo annual audits reviewed by U.S. regulators or be forced to delist.

The measure, which could quickly get signed into law by President Donald Trump, would require the Public Company Accounting Oversight Board (PCAOB) to oversee audits of Chinese companies’ financials.

That does not bode well for Nio, which stated in its 2019 annual report:

“Because our auditors are located in China, a jurisdiction where the PCAOB is currently unable to conduct inspections without the approval of the [People’s Republic of China] authorities, our auditors are not currently inspected by the PCAOB.”

Taking this into account, the stock of the electric vehicle maker will likely remain vulnerable to sharp swings in the days ahead.

Nio Daily Chart
Nio Daily Chart

Shares of the Shanghai, China-based EV company have plunged nearly 25% since rallying to an all-time high of $57.20 on Nov. 24.

NIO, which is still up a whopping 1,023% year-to-date, closed at $43.04 on Friday, giving it a market cap of $51 billion.

The China-based electric vehicle maker has seen strong growth in vehicle deliveries in 2020, with sales more than doubling from 2019. So far this year, the company has delivered 36,721 EVs, which is 111.1% more than the same time last year.

1 Stock To Buy, 1 To Dump When Markets Open: MongoDB, Nio
 

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1 Stock To Buy, 1 To Dump When Markets Open: MongoDB, Nio

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Comments (15)
Alfredo Castro
Alfredo Castro Dec 14, 2020 8:56AM ET
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Take a look how GS, MS, UBS, JPM value them buy and hold all of them over $50... keep more weeks like the last 3
Mind Trader
Mind Trader Dec 08, 2020 8:41PM ET
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rubbish report... must be a biased shorters..
Andrey Frolov
Andrey Frolov Dec 08, 2020 8:41PM ET
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how did your trade go?
MK MK
MK MK Dec 07, 2020 3:14PM ET
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My rule works again :)Read and do in opposite way
Steven West
Steven West Dec 07, 2020 3:14PM ET
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it seems you are right again.
Jesse Cohen
Jesse Cohen Dec 07, 2020 3:14PM ET
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Steven West  How did that weekly trade turn out boys?
Trade Brock
Trade Brock Dec 07, 2020 1:34PM ET
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In all forums, there is a lot of discussion about NIO, it seems that many people already have these shares, and many who are interested in it. For comparison, TESLA ($ 632) 3Q - 139300 auto, NIO ($ 45) 3Q - 12206 auto. The difference is 10 times, respectively, the price of NIO is $ 60, or Tesla is $ 480 .......The author of the article is not friendly with mathematics.
Dub Deason Deason
Dub Deason Deason Dec 07, 2020 10:19AM ET
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Strange - anything informative opinion on china - gets almost instant vilification. Chinese agents at work to prop up the party line. Biggest section of article on MDB no comments???? Hum? Me wonders??
Drone Maniac Esperança
Drone Maniac Esperança Dec 07, 2020 6:51AM ET
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You are really a zero of a person. I wish Karma comes and bites you in the ******** Stop lying to people.
Johnny Hawker
Johnny Hawker Dec 06, 2020 7:27PM ET
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This was an ignorment of the facts.
Clyde Cruz
Clyde Cruz Dec 06, 2020 4:50PM ET
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Nio or any other China stock wont be delisting for a time to come.lol
Matsi giorgadze
nicu Dec 06, 2020 4:36PM ET
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You completely ignored all the facts. Just awful reporting
chino Choi
chino Choi Dec 06, 2020 2:09PM ET
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Dump it !
Jason Zou
Jason Zou Dec 06, 2020 12:53PM ET
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Your credibility of prediction is still to be seen.
Titilayo Adekanmbi
Titilayo Adekanmbi Dec 06, 2020 11:09AM ET
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I don't believe in this man's prophesy. It is not likely to come to pass.
J Collier
J Collier Dec 06, 2020 10:48AM ET
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How is that dump OXY call at $10 working for you? For those who read this guy, you may want to be ready to buy NIO.
Edgar Rodriguez
Edgar Rodriguez Dec 06, 2020 10:44AM ET
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I would also caution people to “dump” Nio. The China listed companies have 3 years to reveal worthiness of remaining listed on US market. For those holding Nio at prices below $20 ... we may never see that again. I speculate anyone who dumps those shares will get scooped up by big investors. Take caution and watch the technicals and decide for yourselves where to take profit vs manage your risk tolerance of holding.
Cindy Workman
Cindy Workman Dec 06, 2020 9:30AM ET
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Jesse, that is not the current situation with NIO but 2019 status. Maybe you should print current status !
 
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