4-Star Stocks Poised to Pop: Activision Blizzard

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, video game giant Activision Blizzard (Nasdaq: ATVI  ) has earned a respected four-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 facts

Headquarters (founded) Santa Monica, Calif.
Market Cap $13.1 billion
Industry Home entertainment software
Trailing-12-Month Revenue $4.4 billion
Management President/CEO Robert Kotick
CFO Dennis Durkin
Return on Equity (average, past 3 years) 5.6%
Cash / Debt $3.2 billion / $0
Dividend Yield 1.5%
Competitors Electronic Arts
Take-Two Interactive Software

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 97% of the 7,203 members who have rated Activision believe the stock will outperform the S&P 500 going forward.  

Just last month, one of those bulls, All-Star investorpoet2, tapped Activision as a solid bargain opportunity:

Keeps looking cheaper and cheaper. Great franchises. Just because [World of Warcraft] is in decline does not mean the end of growth for the company.

Adding at 16x earnings, 14.5x cash flow, and 1.2x book value. The forward P/E is 10.6. This for a company that is estimated to grow at 10%/year for the next five years. This looks to be a conservative estimate of growth.

If you want market-thumping returns, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future. Of course, despite a strong four-star rating, Activision may not be your top choice.

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Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Motley Fool newsletter services have recommended buying shares of Activision and Take-Two, as well as creating a synthetic long position in Activision. Try any of our Foolish newsletter services free for 30 days.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

Read/Post Comments (2) | Recommend This Article (2)

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 September 06, 2012, at 2:45 PM, n8larson wrote:

    Hasn't ATVI been "poised to pop" consistently since about 2007? This may be a robo-article, but when someone asks, basically, "This stock can't continue to get cheaper forever, can it?" I have the answer. Maybe not literally "forever", but in the more general sense, yes, it can. It's been trading between about 10 and 14 since the '09 blip, and if the only reason it's poised to pop NOW is that the market STILL hasn't noticed how strong it is, then I'm very skeptical.

  • Report this Comment On September 06, 2012, at 9:40 PM, GunLock123 wrote:

    This isn't the kind of reason that makes stocks 'pop'. I don't see how you got the 10% growth rate either.

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