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Electronic Arts Inc. (ERTS) Message Board

  • velocity_capital velocity_capital Apr 3, 2006 6:26 PM Flag

    Another Couple of Points...

    And it's time to short. 1 year RS is low and institutional ownership down most recent quarter. Any third rate company with a room full of programmers can design a game. Programmers are becoming a dime a dozen these days--barriers to entry are low. Too many companies are making games.

    Trading at 50 times analysts optimistic 07 analysts is overly optimistic despite all the positive catalysts. This stock is very vulnerable to any bad news or market risk. If you're an investor with a 1 plus year time horizon you should be concentrated in energy or commodity companies.

    Do you want your investment dollars in a stock like COP at 5 times forward earnings in a business that's perceived as cyclical growth but is now secular growth or ERTS at 50 times forward earnings in an industry perceived as a secular grower but is now a cyclical grower.

    Think about this because it's a no brainer for long term investors. Read up on Hubbert's peak and it's implications. Investing in overownded and overvalued tech companies trading at multiples that ERTS is trading at is foolish. If you're a trader it's another matter altogether.

    Still hoping for a little more rally to bring in some optimism and stop out a few shorts before I pull the trigger on the short side.

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • so what do you think is a money maker right now!

    • >>Truly priced in with a p/e 0f 67 and a negative growth trend are you crazy?<<

      Yes, and the negative growth trend will SURELY continue into the next-generation feeding frenzy. What was I thinking??

      >>Be thankful for the Merril upgrade because this stock would be testing the 52 week low without it. Use this as an opportunity to sell.<<

      Why sell? Short it! Come on... Be a man! It's guaranteed money, after all!

    • <<<News flash: The bad news has been well and truly priced in.>>>

      Truly priced in with a p/e 0f 67 and a negative growth trend are you crazy?

      Be thankful for the Merril upgrade because this stock would be testing the 52 week low without it. Use this as an opportunity to sell.

    • >>Any third rate company with a room full of programmers can design a game.<<

      Yep, but only a top-shelf publisher can successfully market and support that game. Lots of very good games die on the vine due to poor publisher retail support and marketing.

      >>Programmers are becoming a dime a dozen these days--barriers to entry are low.<<

      Programmers are a dime a dozen? You, sir, are smoking so much crack your grandchildren's grandchildren will come up hot on drug tests for their entire lives. VG development is what I do for a living, and "sushi-grade" engineers are in extremely short supply.

      >>Too many companies are making games.<<

      That's true, and at least two third-tier publishers won't be around a year from now.

      >>Still hoping for a little more rally to bring in some optimism and stop out a few shorts before I pull the trigger on the short side.<<

      Why wait? Go ahead and short now, particularly with the most impactful E3 in industry history coming up next month. Go on. Short it. Guaranteed money...

 
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