Apple Inc and James Bond Can Take This Stock to New Highs

This mobile gaming stock has been on a terrific run, and there's more upside in store.

May 5, 2014 at 5:00PM

Mobile gaming company Glu Mobile (NASDAQ:GLUU) once again impressed the Street with its latest first-quarter results. Although the company's guidance was a bit mixed, the long-term prospects of Glu Mobile are quite strong given its recent moves and the projected growth of the mobile gaming market.

According to App Annie, spending on mobile games more than doubled in 2013, and this trend won't be slowing down any time soon. By 2017, the mobile and online gaming sectors are expected to hit $60 billion in revenue, as reported by Digi-Capital. In addition, the fact that Glu generates almost 60% of its revenue from Apple's (NASDAQ:AAPL) iOS platform could be another big growth driver.

Prepare for some "fruitful" growth
According to the company's 10-K, the introduction of the iPad mini was a key growth driver as it spurred the adoption of tablets. As Apple is rumored to launch some exciting devices this year, Glu Mobile can expect an increase in its addressable market.

The most exciting rumor doing the rounds is that Apple is prepping the launch of a 5.5-inch phablet. A phablet from Cupertino could lead to massive upgrades, both from existing iPhone holders and Android customers who have stayed away from the Apple ecosystem so far because of a smaller screen size. Moreover, the phablet market is booming, as according to a Kantar survey, devices with a screen size of more than 5 inches accounted for 40% of shipments.

Hence, this move might increase Apple's sales further, and since higher sales of iDevices mean that more customers will have access to the app store, Glu Mobile will benefit.

The "dash" to the top
But, to tap the fast-growing mobile gaming market and to churn out top grossing games regularly, Glu needs to stay on top as far as the quality of its games is concerned. As such, the company is trying to double the lifetime revenue of its new games released under its existing franchises through improvements in gameplay and other features. 

Additionally, Glu is aggressively expanding its existing portfolio of games and recently announced the acquisition of PlayFirst, the creator of popular games such as Diner Dash, Cooking Dash, Hotel Dash, and Wedding Dash. So, Glu would add four successful games to its portfolio after acquiring PlayFirst. These four games have together aggregated more than 750 million downloads across several platforms over the past 10 years. 

Glu would start leveraging this acquisition by globally launching a free-to-play Diner Dash game in the fourth quarter.

Bonding with the best
Glu's robust results have been driven by organic means so far. Its different franchises such as Contract Killer, Deer Hunter, Eternity Warriors, Frontline Commando, etc. have been quite successful. Now, the company is looking to add another blockbuster to this list by launching a James Bond title.

In April, Glu entered into an agreement with EON Productions and MGM Interactive to create the first free-to-play mobile game in the history of the Bond franchise. The game is scheduled for launch in the summer of 2015, and could turn out to be a massive long-term growth driver for the company. The James Bond movie franchise has grossed billions in revenue across the globe over the years, and it hasn't been tapped on mobile yet. 

Investors can count on Glu to execute this opportunity smartly as it now has some expertise with movie-related titles. In the first quarter, Glu had launched RoboCop, and the title generated $3.5 million in revenue. This was almost 7.5% of Glu's total revenue during the first quarter. It goes without saying that Glu will try to leverage the popularity of the Bond series on mobile, an area where no other game developer has ventured yet, by making aggressive investments.

The takeaway
Glu Mobile has several factors going in its favor. The expected growth in its addressable market due to Apple's new devices, the overall growth of the mobile gaming industry, and the introduction of a popular franchise based on the James Bond series are catalysts that could take the stock to new highs. So, Glu Mobile is still game for growth in the long run.

The biggest thing to come out of Silicon Valley in years
If you thought the iPod, the iPhone, and the iPad were amazing, just wait until you see this. One hundred of Apple's top engineers are busy building one in a secret lab. And an ABI Research report predicts 485 million of them could be sold over the next decade. But you can invest in it right now... for just a fraction of the price of AAPL stock. Click here to get the full story in this eye-opening new report.

Harsh Chauhan has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. 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 Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.


Compare Brokers