This company is a leading video game developer that should benefit from not only the continuing rise in new console sales, but the rising trend of mobile gaming. Electronic Arts Inc. (NASDAQ: EA) produces top-selling games and related content and services under the EA brand in various categories, including action-adventure, role playing, racing and first-person shooter games.
The company, which is very well known for their EA sports games like Madden Football, has made the move into mobile play by adapting many of the top franchise titles, which have been popular for years, into the mobile arena. The company reported solid third-quarter earnings and raised its guidance for Star Wars Battlefront to 13 million units. Many analysts feel that is a very beatable number. Cowen agrees and continues to expect Star Wars to sell at or slightly above the levels embedded in the company’s management’s fiscal year 2016 guidance.
Cowen also noted that Madden NFL 16 placed two SKU’s in the top 20 over the three-day Black Friday weekend. This came without the aggressive discounting that the company has offered over the past four years.
The Cowen price target is $79, and the consensus target is $82.29. The stock closed Tuesday at $68.63.
Take-Two Interactive Software
This is another top video game producer, and it has cashed in with some super-hot titles. Take-Two Interactive Software Inc. (NASDAQ: TTWO) offers its products under labels including Rockstar Games and 2K. It develops and publishes action/adventure products under the Grand Theft Auto brand, as well as other franchises, including L.A. Noire, Max Payne, Midnight Club and Red Dead under the Rockstar Games label. The Grand Theft Auto franchise has been one of the best-selling video games ever released.
The company posted very solid second-quarter fiscal 2016 numbers, and this is another stock that remains a large hedge fund favorite. In fact going into the fourth calendar quarter of 2015, 35 hedge funds had positions in the company.
The Cowen target is $36, and the consensus figure is at $37.94. The stock closed trading on Tuesday at $35.99.
The video game industry is huge, and aggressive investors should carve out a place in their portfolios for a position. Remember, it’s not just kids and teenagers that are into gaming. Millennials and older players are everywhere. Plus, the more advanced the technology, the cooler that games, and that keeps players coming back for more.
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