Should You Buy MongoDB Over Take-Two Interactive Stock?

Given its better prospects, we believe MongoDB stock (NASDAQ
NDAQ
: MDB), a database software provider, is a better pick than Take-Two Interactive stock (NASDAQ: TTWO). That said, both stocks have the potential for substantial gains in the next three years. Although these companies are from different sectors, we compare them because they have a similar market capitalization of around $24 billion. The decision to invest often comes down to finding the best stocks within the parameters of certain characteristics that suit an investment style. The size of profits can matter, as larger profits can imply greater market power. Since these stocks are from different sectors, comparing P/S against one another may not be helpful. We compare their current multiples with the historical ones in the sections below to better gauge their valuations.

Interestingly, MDB stock has had a Sharpe Ratio of 0.9 since early 2017, higher than 0.5 for TTWO and 0.5 for the S&P 500 Index over the same period. This compares with the Sharpe of 1.2 for the Trefis Reinforced Value portfolio. Sharpe is a measure of return per unit of risk, and high-performance portfolios can provide the best of both worlds.