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.
>>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...
<<most impactful E3 in industry history coming up next month>>
It still has no bearing on the sad numbers these markers are doing lately. If you don't believe go back and check for yourself. The warnings will come again across the board in this group in the next week or so. There's a black cloud over this sector right now and it looks like it isn't going to clear anytime soon. 360 or ps3 it's just not going down like people hoped, you are looking at about a year and a half to shake out this transition.