For almost a year now the stock market has traded sideways. In fact the S&P 500 closed Friday at the same level it was at in late November of 2014. The stock market remains a place to invest even though interest rates are poised to rise. Finding good growth stocks that have not been momentum darlings has been a challenge. A new report from Jefferies offers some very solid ideas for investors.
This company reported outstanding earnings recently and could be poised for a solid move higher. Activision Blizzard Inc. (NASDAQ: ATVI) develops and publishes online, personal computer, video game console, handheld, mobile and tablet games worldwide. The company develops and publishes interactive entertainment software products through retail channels or digital downloads, as well as downloadable content to a range of gamers. The company’s Call of Duty franchise has propelled earnings for this industry powerhouse for years.
Jefferies thinks the guidance the company gave when it reported is very conservative. The team also thinks the content the company will release in the rest of 2015 is outstanding and not fully reflected in the guidance. The growth in the quarter was particularly impressive given two challenges: the strong dollar and unfavorable comparisons to the prior year quarter, which were lifted by strong sales of “The Amazing Spider-Man 2.” Much of that growth was fueled by Destiny, Heroes of the Storm and Hearthstone, which now have 70 million registered players combined. The three titles have generated over $1.25 billion in non-GAAP revenues to date.
Activision investors are paid a 0.8% dividend. The Jefferies price target for the stock, which is one of the firm’s Franchise Picks, is posted at $33. The Thomson/First Call consensus price objective is $31.55. The stock closed on Friday at $28.78.