Big data companies and data analytics: the stocks you should buy and watch

The vast amounts of information generated and used for business decision-making today are fueling the booming business of data analytics and Big Data companies.




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Big Data companies, coupled with analytics technology, help companies gain valuable insights in many areas. In addition, this includes in-depth customer research, product development, cost management and competitive analysis. Big Data also provides operational intelligence, enabling companies to investigate, monitor, analyze and then react and respond to situations.

The application of data analytics impacts organizations in virtually every industry and actively participates in developing strategies for their success.

For retailers, Big Data companies help them gain a better understanding of customers and the most effective ways to keep them coming back. As a result, manufacturers can solve problems faster and make more flexible business decisions. Bankers also use it to minimize risk and fraud.

Data analysis and Big Data are complementary terms, hence the term Big Data analysis also used.

Big Data companies to buy and watch

The list of Big Data companies continues to grow. Leaders in the field include: MongoDB (MDB), Elastic (ESTC), Activities (World Cup) and splunk (SPLK). Big data companies can specialize in a variety of areas, including data mining and cleansing, data analytics, machine data, visualization, and storage.

The Big Data trend has also led to an expansion of IPOs for investors to check out. Recent Big Data IPOs include: Alteryx (AYX), cloudera (CLDR) talent (TLND) and new relic (NEW). Splunk was one of the first to come out.

What is big data?

Big Data describes massive amounts of data that flood a business on a daily basis, coming from an ever-growing variety of sources. It typically describes data sets with a size that is beyond the ability of traditional data processing software tools to capture, process, and manage in a timely manner.

The data creation and collection process comes from sources such as wholesale or retail transactions, e-commerce data, shipping, audio and video logs, text messages, Internet searches, satellite imagery and GPS data, as well as stock market activity and financial transactions . Data is also flowing in from the Internet of Things.

The vast amounts and different types of information collected allow Big Data companies to approach the market in different ways and specialize in specific areas.

What is data analysis?

Data analysis is the method of extracting and analyzing all kinds of data in order to draw conclusions about the information. In addition, it reveals hidden patterns or unknown correlations within the data, or discovers emerging market trends and customer preferences.

But data analytics doesn’t necessarily just apply to Big Data. For example, data analytics can apply to most types of operations that analyze data, but as the size of organizational data grows, the term data analytics evolves to favor Big Data-enabled systems.

In addition, the field of data analytics is growing rapidly, driven by market demand for systems that can handle the high demands of Big Data.

A first for big data stocks

There are substantial opportunities to invest in Big Data companies. Here is an overview of some stocks.

MongoDB

MongoDB provides an open-source enterprise database platform, with a subscription-based software-as-a-service business model.

It reported fiscal second quarter results on Sept. 2 that increased earnings targets. MongoDB shares rose 25% in response. Sales rose 44% to $198.7 million. It reported an adjusted loss of 24 cents a share. MongoDB also provided positive revenue forecasts for the current quarter.

The company has yet to show a profit. However, sales continue to grow by double digits every quarter.

splunk

Splunk provides intelligence software designed to help organizations find, correlate, analyze, monitor and report data in real time. The software is aimed at analyzing large amounts of historical information. They are specialized in machine data applications.

On August 25, it reported second-quarter results that were ahead of estimates, as well as its third-quarter revenue outlook. Revenue rose 23% to $606 million, against expectations of $563 million.

Splunk is undergoing a cloud transition to a software-as-a-service business model as it faces increasing competition. This also includes a transition to annually recurring income. On that basis, cloud ARR grew 72% $976 million. Total ARR was $2.63 billion, an increase of 37%.

Elastic

Recorded in the Netherlands and based in Mountain View, California, Elastic says its search technology finds information and insights from large amounts of data, available for a diverse range of applications and use cases, for example.

Elastic reported first quarter results on August 22 that beat estimates. Turnover increased by 50% to $193.1 million. It showed an adjusted profit of 4 cents a share, versus expectations of a loss of 12 cents.

The company uses a cloud-based, software-as-a-service business model. It ended the quarter with 16,000 customers.

Activities

Workiva provides a cloud-based and mobile-enabled platform used by businesses to collect, analyze and manage business data. Customers use Workiva’s software to streamline complex business and reporting processes by connecting teams, documents, and data from initial sources to final reports. The platform enables the collection of financial, accounting and risk management data for compliance reporting.

It reported: second quarter results on August 3, that exceeded estimates as it raised the outlook for the full year. Sales rose 26% to $105.6 million. In addition, it reported adjusted earnings of 7 cents per share. It has more than 3,949 customers.

If you’re interested in buying large-cap stocks, these articles provide a technical analysis of leading large-cap stocks to see if they’re in or near a good buy zone.

Also, before making any investment decisions, check: current market conditions and use IBD stock control For example, to see if your stock gets enough ratings for key fundamental and technical criteria.

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Follow Brian Deagon on Twitter at: @IBD_BDeagon for more information on technology stocks, analysis and financial markets.

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