Accelerating online sales going fwd from multiple sources, great game lineup (including sports games perfect for the Wii), expanding Ad revenue, exclusive licenses, real time strategy games & MORPG company acquisitions of Phenomic Games & Mythic Entertainment, Stake in Ubisoft, in-flight entertainment, a potential tie-in to IPOD/IPHONE, and two guys named Spielberg & Wright that I hear may have talent. They are also expanding their exposure to overseas mkts like Korea(Neowiz) and China(rumored interest in NCTY). I don't think the SingShot acquisition will hurt them but I'm not increasing my estimates because of it. Who knows though, it may turn into an on-line American Idol. That would add quite a bit to the bottom line..
2.-->Recent history of success:
Top 10 console/handheld VG�s 2006 (3 of top 6 & 4 of top 10):
1. "Madden NFL 07," EA
2. "Cars," THQI
3. "Lego Star Wars II: The Original Trilogy," LucasArts
4. "NCAA Football 07," EA
5. "New Super Mario Bros.," NTDOY
6. "Need for Speed: Most Wanted," EA
7. "Gears of War," MSFT
8. "Call of Duty 3," ATVI
9. "Lego Star Wars," LucasArts
10. "Fight Night Round 3," EA
Top 10 PC VG�s 2006 (3 of top 5 & 5 of top 10):
1. "World Of Warcraft," Vivendi
2. "The Sims 2," EA
3. "The Sims 2: Open For Business Expansion Pack," EA
4. "Star Wars: Empire At War," LucasArts
5. "The Sims 2 Pets Expansion Pack," EA
6. "The Elder Scrolls IV: Oblivion," TTWO
7. "Age Of Empires III," MSFT
8. "The Sims 2 Family Fun Stuff Expansion Pack," EA
9. "Civilization IV," TTWO
10. "The Sims 2 Nightlife Expansion Pack," EA
Source: The NPD Group / http://www.npd.com/press/releases/press_070119.html
3-->Good Valuation. YEP, that�s what I said!!
ERTS, like most other stocks, trades on �FUTURE earnings�. Those P/E�s the Bears love to refer to look much different when you plug in FUTURE earnings. However, you have to be able to come up with what the future earnings will be so maybe they're incapable of such calculations. If you plug in earnings of 1.50 for FY08� the P/E looks a lot different. That�s over 100% EPS growth, a BUY signal doesn�t get much brighter than that. EA's conservative accounting approach of expensing, instead of capitalizing, its R&D efforts means that those up-front costs are now substantially accounted for. BTW, MY estimates are not pulled from the Yahoo site, I�ve been above the avg FY08� estimate for a year now & the "analyst" have been moving their numbers closer to mine, FINALLY�
4--> Barrons is now calling for 30% upside (Yet another comes over to my side).
5--> 11 Hold and 1 Sell(LOL) ratings. I'm looking for 4-6 upgrades/Reiterations over the following six months (Only 1.5 in Mar-May but the rest will come by Nov 30 IMO).
Anyone extremely negative (like you "35ish" & "40-42" Bears) should simply put on a short position from now (at $50) until 30 Sep. Or, you could simply write Calls for some nice free money & let it ride till expiration. You only have to write 14 SEP 45 call contracts to get a payday of over $10,000 of "free" money to go on vacation with. It's free (given a negative outlook) because they�ll expire worthless when ERTS is trading below $45 on 21 Sep.
As for me, I'll be selling those JAN 09' $60 puts if they hit $14.5 so get your orders in to sell them to me if you�re a BEAR!! I don't expect to get a fill on these but I'll be happy if I do.
I would welcome an "intelligent" rebuttal (to each numbered item so everyone can keep up) but I won't hold my breath because the typical basher usually has nothing more to contribute than meaningless blather and drivel.
Good Investing to all!!!
Regarding ATVI- I still like them as well. Here's a recipe for a good "investment" (I say investment because it's a 19 month "trade"):
Sell Jan 09' 17.50 calls
Net out of pocket is $14.00
Stir for 19 months and you get a 25% return (15.8% annualized). Unless you think ATVI will be < $17.50 in Jan 09' this is a good bet for a descent rate of return.
Good Investing to all!!!
A standard timeframe you put on your price predictions is 12-24months. However, you do that on a monthly basis with the same timeframe. My point is not to make fun of you. It's to show you that you are not fooling me... only yourself. What do I care what price erts is in X months? I dont.
Here is a fun one:
Re: Where is Austin?,,, nowhere to be seen (Not rated) 19-Dec-06 04:58 pm
U will never "re-enter" if your waiting for $40. I own a 1/3 position in call options and my 2nd 1/3 position will execute if ERTS trades down to 51. I will buy my last 1/3 position if it hits the low 49's but I don't expect to get that last 1/3. EA will hit the $60+ level between now and July.
Good trading to all!!
I agree with you on your time frame, but what I don't beleive, is that given the valuaiton here, the stock can going meaningfully higher. In two years, todays price will be fair. In three years, it oculd be at 70. Believe me, I'm not gonna short for 3 years. Just until this pricey stock takes a hit, then I will cover. It's a "trade," which no doubt you can apperciate, as you are "investing."
Short until disaster strikes.
dumbkid (still don't know why you picked that name),
Thanks for the link. I've actually seen this bloggers stuff before. He has a website called informationarbitrage that he posts from (I don't know if his site is spammed on the message boards or not). I don't go to his site but I know that some of his writings (like other bloggers writings) are occasionally picked up by the AP.
One of his last statements in that article is "EA has won before and I am sure they'll win again". On this point I completely agree.
In reference to your post about 18-24 months-
I'm not going to repost (again) the link that I've posted for you a few times already. It basically says "lets see where we are in mid June of 2008 since that's the end of my original 18-24 month timeframe"... You seem to have a hard time remembering though. Go ahead and tag this post so you can pull it up at that time (I know you are planning to anyway). However, I doubt you'll actually remind us of this post if ERTS is actually in the mid 60's to 70's at that time. Time will tell...
Good Investing to all!!!
Just so you don't get confused, the "any of any of my posts (the ones I have repeatedly referenced)" statement in my previous post refers to the my original Jun 06' posts that called for 18-24 months. That expires in Jun 08' so get back to me then with your "arguments" if you can even call them that).
Apparently, you really are missing a few cards. If you ever read (for understanding) any of my posts (the ones I have repeatedly referenced) you SHOULD notice that I referenced an 18-24 moth timeframe. I have never wavered from that. Therefore, you saying "If it goes down, ignore your prediction until someone reposts it for you, then say, with appropriate rolling of eyes, "But it's a LONG TERM investment"" is a nonsensical statement because it infers that I said it was a short term investment at some time (which I NEVER have).
You have no point and the ones you have tried to levy have been based on inaccurate/misread/misquoted information. When I have called you on that inaccurate/misread/misquoted information you have had NO answer to it because there is none.
Seriously, take some of those classes; you will be happy you did.
Good Investing to all!!!
"I already explained that the focus of that argument was that a stock (ANY STOCK) going down while the mkt goes up is not automatically a bad thing; it can actually bean even better buying opportunity."
That is a weak argument. Saying it's an even better buying opp is saying it's a good thing. So it's a good thing when the stock is going up, and it's a good thing when the stock is going down (even while the market is going up). Hey, you've just found a way to be right 100% of the time, congratulations! In your own head anyway.
If it goes up, repost your prediction for personal validation. If it goes down, ignore your prediction until someone reposts it for you, then say, with appropriate rolling of eyes, "But it's a LONG TERM investment", and then start posting personal attacks as a distraction. Later, in 2, 3, 5, 10, or 20 years or whenever your time frame of "even better buying opp" ends, you may admit that the stock at $0.01 was a bad investment but thankfully it was a very small part of your portfolio and the other 99% has been doing great, thank you very much.
For the love of Pete and all that is Holy... The point WAS NOT a direct comparison between FWLT and ERTS. I already explained that the focus of that argument was that a stock (ANY STOCK) going down while the mkt goes up is not automatically a bad thing; it can actually bean even better buying opportunity. I even used three DIFFERENT stocks to emphasis the same point. Here's an excerpt from the post were I used those three stocks:
"You do try to read don't you? If so you should have figured out that the Wii surprised the VG industry with its success. From that you should have been able to figure out (it's fairly obvious) that EA's growth was going to get slowed down a bit. That's why having a long term outlook is key to investing in undervalued stocks (I won't mention FWLT again so let's use MAT, BA, & DKS this time). Up 55% in 2 yrs, 25% in 6 months, and 60% in 16 months (sold last Nov for $55). I road all of those socks through ups and downs and was down as much as 15-20% at times along the way. BTW "thedumbkid99", that's not a direct comparison either, hopefully you get it."
The point was/is that a stock going down is not necessarily the sign of a bad investment. The key word is "investment" as opposed to "trade". You obviously understand this if you bought and held FWLT 2 yrs ago. There was never any direct comparison being drawn between ERTS and FWLT, MAT, BA, OR DKS. They were examples of stocks that went lower after the initial investment but that turned out to be great "investments". Again, that's why I always talk about buying 1/4 to 1/3 of a position at a time. Why? Because nobody calls the bottom or top.
BTW, I never called you a 3 yr old so there�s no point there. That was directed to someone else who has a history of acting that way. I don't just start whipping out the "names" on someone. They have to "earn" it LOL.
I already own GME; it's a big holding for me (as I said in the post where I listed my portfolio). Half of it is leftover from an ELBO purchase for $20 in late 03' or early 04' (I don't know the exact date off hand but I know I was in Okinawa at the time, possibly on a ship). I also bought some �GME actual� for $19.50 in Mar 05� for my IRA. I�m considering selling some calls against 1/3 of my positions in the $38-39 range.
Since you read the whole conversation it would have been nice to see you comment as to why you disagree with the very first point. Here�s what it said:
�Accelerating online sales going fwd from multiple sources, great game lineup (including sports games perfect for the Wii), expanding Ad revenue, exclusive licenses, real time strategy games & MORPG company acquisitions of Phenomic Games & Mythic Entertainment, Stake in Ubisoft, in-flight entertainment, a potential tie-in to IPOD/IPHONE, and two guys named Spielberg & Wright that I hear may have talent. They are also expanding their exposure to overseas mkts like Korea(Neowiz) and China(rumored interest in NCTY). I don't think the SingShot acquisition will hurt them but I'm not increasing my estimates because of it. Who knows though, it may turn into an on-line American Idol. That would add quite a bit to the bottom line..�
Update: We can now change �rumored interest in NCTY� to �an investment in NCTY�. The movie based on the Sims is interesting too.
After you show why none of those are positive catalysts we can move on to me recapping other posts I�ve made IRT numbers from the income statement.
Good Investing to all!!!