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4 Stocks I'm Watching This Week as Potential Buys

By Jose Najarro – Dec 7, 2021 at 10:30AM

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Could this market downturn provide long-term investors with great buying opportunities?

Today's video focuses on recent stock price action and earnings affecting MercadoLibre (MELI 4.05%)Cerence (CRNC 4.70%)Shopify (SHOP 3.08%), and DraftKings (DKNG 2.38%), four stocks I am keeping my eye on this week. Here are some highlights from the video. 

  1. Cerence is a company that focuses on bringing conversational AI to the mobile world. The company's primary form of revenue comes from the automobile industry, which has caused some headwinds as automobile productions have slowed down due to semiconductor shortages. Regardless of the headwinds, Cerence grew its revenue 7% year over year in its most recent quarter and entered markets outside the automobile industry.
  2. DraftKings is still burning cash, but it does have a substantial cash position to allow its growth expenses. During its most recent earnings report, the company announced that online sports betting is available to only 29% of the U.S. population and other forms of online gambling ("iGaming") to only 11% of the U.S. population. 
  3. All four companies are down substantially from all-time highs. I discuss the bullish and the bearish thesis for each stock in the video. One of the most noticeable risks for Shopify is the high valuation it holds. Regardless, this is a company growing substantially every quarter.

Click the video below for my full thoughts and analysis.

*Stock prices used were the closing prices of Dec. 3, 2021. The video was published on Dec. 4, 2021.

Jose Najarro owns shares of Cerence Inc., DraftKings Inc., MercadoLibre, and Shopify. The Motley Fool owns shares of and recommends MercadoLibre and Shopify. The Motley Fool recommends Cerence Inc. and recommends the following options: long January 2023 $1,140 calls on Shopify and short January 2023 $1,160 calls on Shopify. The Motley Fool has a disclosure policy. Jose is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.

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