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  1. Home
  2. / Investing
  3. / Stocks

This 'Dog' Could Have Its Day in 2020

Want another pick for this year? A recent IPO is in a good position to be a top momentum name.
By JAMES "REV SHARK" DEPORRE
Jan 06, 2020 | 01:00 PM EST
Stocks quotes in this article: DDOG, CSCO

I previously discussed my top stock pick for 2020, which is a biotechnology name.

Now, I am now going to start talking about several other stocks that I believe will do well in the year ahead.

First up is Datadog (DDOG) , which came public in September at an offering price of $27. Cisco (CSCO) attempted to acquire the Datadog before it went public but it rejected the offer and is now substantially higher than the offering price.

Datadog's first report as a public company was quite strong and it increased guidance, although it appears that management left plenty of room for a solid beat. I believe that investors will be anticipating that report and will bid the stock up into the announcement in March.

The company's technology is complex and I don't pretend to understand it very well. The essence of its business is that it allows companies to monitor how well their cloud environment is operating.

Datadog is a leader in a niche known as "Kubernetes," according to Barron's. Kubernetes is the Greek word for helmsman or pilot. It is a way for an application to be scaled across a number of different servers, clouds or operating systems. A good example is Gmail, which is Kubernetes so that a billion users can use the same application.

Datadog is in the right niche and management seems to be lowballing guidance. It is in a good position to be a top momentum name. This is still primarily a revenue play, but Datadog is expected to double its revenues to over $500 million in 2020, which would be 43% growth. With that sort of operational momentum, the stock should follow.

I believe that this story is being quickly discovered, which is why I also named DDOG as my Stock of the Week.

I have several other stocks that I believe will be top picks in 2020 and I discuss them soon.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

At the time of publication, Rev Shark was long DDOG.

Action Alerts PLUS, which Cramer manages as a charitable trust, is long CSCO.

TAGS: IPOs | Investing | Stocks | Trading | Technology

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