5-Star Stocks Poised to Pop: Activision Blizzard

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Based on the aggregated intelligence of 125,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, video game giant Activision Blizzard (Nasdaq: ATVI) has earned a coveted five-star ranking.

With that in mind, let's take a closer look at Activision's business, and see what CAPS investors are saying about the stock right now.

Activision Blizzard facts

Headquarters Santa Monica, Calif.

Market Cap

$12.59 billion

Industry

Home entertainment software

TTM Revenue

$1.89 billion

Management

CEO Robert Kotick (since 1991)

CFO Thomas Tippl (since 2008)

Major Brands

Guitar Hero, Call of Duty, StarCraft, World of Warcraft

Competitors

Electronic Arts (Nasdaq: ERTS),

Take-Two Interactive (Nasdaq: TTWO)

CAPS members bullish on ATVI also bullish on:

Marvel Entertainment (NYSE: MVL),

Google (Nasdaq: GOOG)

CAPS members bearish on ATVI also bearish on:

Research In Motion (Nasdaq: RIMM),

First Solar (Nasdaq: FSLR)

Sources: Capital IQ (a division of Standard & Poor's), and Motley Fool CAPS. TTM = trailing 12 months.

Over on CAPS, 3,350 of the 3,432 members who have rated Activision Blizzard -- or 98% -- believe the stock will outperform the S&P 500 going forward. These bulls include directd and Macsblow.

Last week, directd wrote that Activision is "a winner - profitable, loads of cash, still close to its 52 week low, tremendously undervalued, has proven to deliver outstanding games in [World of Warcraft], Guitar Hero and likely winners in Diablo and Starcraft."

In a pitch from last month, Macsblow elaborates on the company's potent pipeline for '09:

The video game industry as a whole seems weak, so this would be an ideal time for [A]ctivision to slip ahead. Video game giants [Electronic Arts], Atari and Midway are all struggling to keep their products while [A]ctivision has a whole list of titles that should be of great anticipation for most gamers in 2009.

Guitar hero's recent sales have been strong and they should continue with the upcoming release of their new title centered around Metallica. Starcraft II and Diablo III are also slated for 2009....

Overall, this is a solid company with low debt, high revenue and should be a safe investment for the next few years.

What do you think about Activision, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. CAPS is 100% free, so simply click here to get started.

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Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Activision Blizzard, Electronic Arts, and Marvel are Stock Advisor picks. Take-Two and Google are selections of Rule Breakers. The Fool's disclosure policy always gets a perfect score.

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On February 05, 2009, at 4:25 PM, foolgood wrote:

    I'm long ATVI, but Diablo III does not have a release date, and nobody in the industry believes we'll see it this year.

  • Report this Comment On February 05, 2009, at 5:14 PM, kamuirei wrote:

    It should be noted that Blizzard has a tendency to delay releases repeatedly.

  • Report this Comment On February 05, 2009, at 5:36 PM, Mstrhiei wrote:

    Although they push back releases, gamers know that they will get a quality product, at a competitive price. Instead of a hastily and poorly made product that doesn't deliver to the gamers expectations. Blizzard has Millions and Millions of subscribers to alot of their online games. The support and maintainence is superb and unmatched within their field. With many more people staying home more often due to the economy, I see this as a booming industry and Activision/Blizzard is in the lead. Titles are anticipated for 2-3 years. Building the fan base, and seducing the gaming world is a key to their subscription success. This company has no where else to go but UP, since it is already at the top.

  • Report this Comment On February 05, 2009, at 9:29 PM, Varchild2008 wrote:

    We may not see Diablo III this year but Starcraft II based on what I can tell from the websites seems a lot closer to a release date. It would be a nightmare anyway for Blizzard to try and release both games in the same year.

    Possibly could see something like this:

    November 2009: Starcraft II

    March 2010: Diablo III

    This gives 2 consecutive quarters with at least 1 blockbuster title.

    Also..Little unknown fact is Activision Blizzard has another possible blockbuster game flying under the radar that is based on the new XMEN movie: Origins of Wolverine.

    Should that game score high ratings and do as well as Activision's RPG XMEN games in the past, then that's an earnings sleeper to look out for.

  • Report this Comment On February 06, 2009, at 12:21 AM, euser985 wrote:

    Not only do i own shares of this stock, but I have been a fan of Blizzard games for over a decade. This company will not release a game unless they feel that it is a major blockbuster. They once worked on a Starcraft Console game about 3 years ago, and with a lot of time and money put into development and 90% completion, they backed out on releasing it because they didn't feel like it was going to be a big hit like all their previous games. So that is definitely their priority.The original Starcraft (Multiplayer Strategy Game) was released in 1998, sold over 10 million copies worldwide since then, and until today has a few hundred thousand people playing it on the internet. So Starcraft 2 is gonna hit BIG. I would recommend buying this stock TODAY, especially since 4th quarter reports are coming in on February 11th, and that was the period of Warcraft expansion (Record-breaker for PC games: 4 million sold first month), which was immediately followed by a record breaking 11.5 million subscriber fanbase paying $15 a month to keep the game running. The 4th quarter was also strong with Activisions Call of Duty and Guitar Hero sales. When the tremendous results come in on February 11th, I expect the stock to range from $11 to $12. I also expect it to be around $20 in exactly a year.

  • Report this Comment On February 12, 2009, at 7:20 PM, WealthAlchemist wrote:

    Yes, with the StarCraft II coming and its hits like guitar Hero, I think Activision Blizzard is actually very good pick to invest in 2009:

    http://www.wealthalchemist.com/Blog/2009/02/activision-blizz...

  • Report this Comment On February 12, 2009, at 7:21 PM, WealthAlchemist wrote:
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