As most of the equities world occupies itself reporting its first earnings news of fiscal 2007, Activision
After the news comes out, we'll have time aplenty to dissect it. But in these few hours before we begin obsessing over the video game maker's short-term progress, let's take a moment to review what investors think about it as a long-term investment. Our tool in this endeavor: Motley Fool CAPS, where we poll more than 29,000 investors for their views on well more than 4,000 companies, Activision included. Here's what Fools have to say about the company.
Up or down?
Nearly 800 investors have submitted opinions on Activision. The verdict: Game on!
Among CAPS investors who've rated the stock, 96% expect Activision to outperform the market. When you drill down to the opinions of our very best investors -- the CAPS All-Stars -- an even more impressive 97% give the stock two joysticks up. That's enough to win Activision four out of five possible stars.
Among its CAPS gaming peers, Activision just lags the current score leader:
|
Video Games Group |
|
|---|---|
|
Nintendo (OTC BB: NTDOY.PK) |
***** |
|
Activision |
**** |
|
Logitech |
**** |
|
Electronic Arts |
*** |
|
Microsoft |
** |
|
Take-Two |
* |
Wall Street vs. Main Street
As enthusiastic as individual investors feel about Activision, Wall Streeters cheer even louder. A unanimous 18 out of 18 analysts we track on CAPS think Activision will outperform the market. Indeed, the stock has walloped the S&P 500 by nearly 32 percentage points over the last 52 weeks.
Bull pitch
For today's bull pitch, let's go right to the source of Activision's inclusion in the Motley Fool Stock Advisor newsletter -- and the source of two recommendations that have netted Foolish investors an average of 303% capital appreciation apiece. Fool co-founder David Gardner, you're up:
A long-term winner. Company is very well-positioned in interactive entertainment, a guaranteed growth industry for at least the next decade. I would like to see them develop some more of their own original intellectual property, but even just latching onto Marvel and others Activision has performed superbly. Buy to hold.
Bear pitch
Bears call bull hockey on that optimistic argument, however, with one All-Star player warning:
Even if earnings quadrupled from current level will still have a P/E of 20. So, if you invest in this stock at this level you are betting that in the next 2 years earning will quadruple. Could happen given the new consoles and the cyclical nature of video game earnings, but odds seem low.
The rest of the story
What else are Fools saying about Activision? To find out, and to explore the plethora of additional financial data we've put together on the company, click here.
Nintendo, Activision, and Electronic Arts are Stock Advisor recommendations. Microsoft is an Inside Value newsletter selection. Try any of our Foolish newsletters free for 30 days.
Fool contributor Rich Smith does not own shares of any company named above. You can find him on CAPS, publicly pontificating under the handle TMFDitty, where he's currently ranked 1,530 out of more than 29,000 raters. The Fool has a disclosure policy.
