Please ensure Javascript is enabled for purposes of website accessibility

2 Stocks to Put on Your Radar

By Matthew Frankel, CFP® – Aug 17, 2021 at 6:48AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Here are two stocks our experts are watching now, and why they think you should as well.

Each week on Industry Focus, host Jason Moser and Fool.com contributor Matt Frankel, CFP, each discuss a stock that is at the top of their watch list. In this Fool Live video clip, recorded on Aug. 9, hear about two tech-focused stocks the pair is keeping an eye on now. 

10 stocks we like better than Unity Software Inc.
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

They just revealed what they believe are the ten best stocks for investors to buy right now... and Unity Software Inc. wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

 

*Stock Advisor returns as of August 9, 2021

 

Jason Moser: What is one stock you've got your eye on this week?

Matt Frankel: One that I talk about somewhat often on this show. We've had the CEO on before. It is Latch (LTCH 2.83%), LTCH, recently went public through a SPAC [special purpose acquisition company]. They report the first earnings of theirs as a public company on Thursday. Now that they have all this SPAC money burning a hole in their pocket, I'm curious to see what they're doing with it, and how it's translating into earnings. Remember with Latch, it's not revenue to pay attention to its bookings. Remember: Latch books their revenue a few years before they actually receive it. Because they are putting their product on newly built apartment buildings, which could take years to plan and build. Pay attention to bookings and growth in bookings, not just revenue, when Latch reports on Thursday. And if the numbers look good, I think it's a big positive for the stock.

Moser: Yeah, absolutely. I'm keeping an eye on Unity (U -4.71%). Software. Earnings for Unity come out on Tuesday after the market closes. This is one that I've been following for a while now. To me, it was really interesting watching this business come public because it was known as a gaming engine. One of their main goals has been to make that leap from being just a gaming engine to becoming what ultimately is seen as a creation engine where its customers in household appliances and automotive and healthcare and aerospace. They want to be seen as a creation engine for all sorts of the markets. I think they're pulling it off pretty nicely. I had initially projected that they should cross $1 billion of revenue no later than 2022. It sounds like they are going to cross that $1 billion revenue mark this year, 2021, so that's nice to see. And a lot of that is because you see customers signing on, staying on, and then continuing to grow their relationships. Last quarter, I believe they reported 837 customers that generated more than $100,000 of revenue each over the last year for the company. We'll pay attention to that big customer metric. We'll pay attention to that dollar-based net expansion rate. That was 140% last quarter versus 133% from a year ago. And it feels like to me, it's still so new to the public markets, we're still letting all of their financial shakeout from the IPO. But the metrics, the key performance indicators are really telling the story here above, company whose services are in high demand so we'll be looking for that.

Matthew Frankel, CFP owns shares of Latch, Inc. The Motley Fool owns shares of and recommends Unity Software Inc. The Motley Fool recommends Latch, Inc. The Motley Fool has a disclosure policy.

Stocks Mentioned

Unity Software Stock Quote
Unity Software
U
$39.01 (-4.71%) $-1.93
Latch Stock Quote
Latch
LTCH
$0.94 (2.83%) $0.03

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.