Last summer, I took a giant leap of faith. Instead of suggesting where to invest -- and then never revisiting my original thesis -- I pledged to put my own money behind 10 stocks. My goal was to build the World's Greatest Retirement Portfolio -- and attempt to hold the stocks for at least three years. Almost one year through, and the portfolio is dominating the S&P 500 -- outperforming the index by 18 percentage points!
Today, I'm happy to state that after almost a year, I'm just as bullish on one of those 10 -- Activision Blizzard
Reviewing my thesis
There were three big reasons behind my original recommendation of Activision Blizzard. The first was the fact that the company was transitioning to a subscription-based model that provided much steadier streams of revenue. As far as subscriptions go, results have been mixed. The Blizzard side of the company famously lost thousands of subscribers over the past year. That has been somewhat mitigated by the Activision side of the company offering a popular subscription model to the Call of Duty Elite franchise.
The second reason I was bullish on Activision was the company's opportunities abroad. Chinese Internet juggernaut Sohu.com
Finally, I was a big fan of the company's rock-solid balance sheet. Nothing has changed there, as Activision has a balance sheet that sports $3.5 billion in cash and no debt.
When you take the see-saw of these three factors into account, and include the company's dividend, a $4,000 investment has returned about $150, as opposed to the roughly $70 an investment in the S&P 500 would have gotten.
Why I'm still bullish
I'll be the first to admit, the defection of subscribers from the World of Warcraft franchise was concerning -- but Activision Blizzard is more than a one-trick pony. The company recently released what hopes to be the next big online game: Diablo III. Though there may have been initial hiccups with providing the game to users, demand is there, and I expect it to show up on the company's income statement. Then, of course, there's always the latest iteration of Call of Duty to look forward to.
Furthermore, I'm encouraged by the company's continued attempts to take the Activision side of its business -- which has traditionally focused on making games for consoles -- toward a subscription model that guarantees steadier revenue streams. I'm also heartened by the fact that though Electronic Arts
Finally, though I don't think mobile gaming specialists like Zynga
A solid bet for your retirement
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The Fool owns shares of and has written calls on Activision Blizzard. Motley Fool newsletter services have recommended buying shares of Activision Blizzard, Sohu.com, and NetEase, and creating a synthetic long position in Activision Blizzard. The Motley Fool has a disclosure policy.
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