Video game developer Midway Games
Before investors start dancing in the streets, the company needs to search and destroy its unprofitable image. Guiding analysts to expect a $20 million loss for the year (and sugarcoating it by noting it's a $95 million improvement over 2003) is no help -- although the company expects to earn $17.5 million in the current quarter. That would be the first profitable quarter since the last quarter of 1999.
Unlike Motley Fool Stock Advisor recommendations Electronic Arts
The company has also been at the center of the Wall Street equivalent of a soap opera. Sumner Redstone, chairman of Viacom
The prospect of a Redstone deal, and the purchase of video game developer Monolith Production by Motley Fool Stock Advisor recommendation Time Warner
The fundamentals underpinning the stock are worth noting. Selling for an extremely rich eight times sales, the company's latest quarter managed gross margins of only 3.5% (while industry giants have gross margins between 43% and 63%). Profitable Activision, with a cash hoard of $600 million and sales more than seven times greater than Midway, has a market capitalization of just more than two times sales.
The game console world of Sony
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Fool contributor W.D. Crotty does not own stock in any of the companies mentioned.