Software stocks are attractive when things are going right. Our Stock Advisor has often uncovered some intriguing opportunities and with good reason. By their very nature, they are built for scale. Once a hot product is developed, the reproduction costs are few and the margins grow wide.
That is why Electronic Arts (NASDAQ:ERTS) is trading at an all-time high today while many smaller software players are scrambling for relevancy. The top-selling software title on Amazon.com (NASDAQ:AMZN) right now is EA's Madden NFL 2004 for the Sony (NYSE:SNE) PlayStation2 platform. If you're into predictable revenue streams, this is pretty much as good as it comes. The franchise has been a top seller for 15 consecutive years.
For other software houses, if you don't get Madden, you don't get even. Sure, some can build a decent living off hot names like Take-Two's (NASDAQ:TTWO) Grand Theft Auto, but EA is a gusher when it comes to revenue streams.
While others like cash-rich THQ (NASDAQ:THQI) and Activision (NASDAQ:ATVI) have firm financial footing as they go for the bunt singles, EA is the home-run hitter. Between The Sims and its various EA Sports releases that beg for annual updates, the company is even an imposing presence online -- it owns Pogo.com and its own namesake gaming haven. Yes, EA is very much in the game. Hopefully, the store will run out of Madden 2004 before you get there today.
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