Been researching ATVI for the last few days and ready to start a position. The current share price seems steeply discounted compared to their performance and excellent balance sheet. I am struggling to understand why this is not trading at a much higher multiple.
Any insights why the stock price is down almost 15% in 2012 with very good results and healthy guidance?
I was an owner of this stock for about a year and watched it for a few more. I still continue to watch it because they make quality products and if they were ever to make a real move I may be interested in owning them again. Unfortunately this stock has been sitting in the 10-12 range for awhile and despite solid earnings and nice prospects in other areas it never can break through.
Good luck with it if you do buy in. Whatever the management is doing here doesn't seem to convince the market. I'm just glad they still make quality products.
I got in today after a lot of thought. I am confident in buying this stock under $11 and see there is at least 10$ upside at this level. If it was trading in the $11.50 range I would not bother as the last 3 years have shown that $12.50 is the top. On the other side, I don't see too much downside risk to go below $10.50. I like those stats.
If they improve guidance on the Feb call and increase the dividend it could breakout out to $15.
I think it's a number of things and its more aggregate factors that has been affecting ATVI's stock. Media analysts have been pushing the death of consoles (as well as pc's) with the rising popularity of cheaper app games from smart phones and tablets. The likes of Zynga (ZNGA) have become the new darlings to take advantage of this new market.
Analysts, however, know very little of the video game demographic. While cheap app games have become very popular, their targeted demographic are more newer casual gamers i.e. business people, females, etc. It's a very similar phenomenon that occurred in the height of the coin slot gaming age of the 1980's. The price point was cheap enough for anyone to play, and games were simple enough for anyone to pick up. This demographic is also not the type to buy the more expensive $59.99 game for consoles.
The decline in overall sales in the video game industry has more to do with a stagnant economy and a prolonged console cycle. Many hardcore gamers are withholding purchases except for the best titles such as Halo 4 and Black Ops II in anticipation of falling prices when next generation console will be unveiled in the next 1-2 years. I have no doubt that once Microsoft (MSFT)and Sony (SNE) unveil their consoles, the public sentiment for the whole video game market will rise. Another company known as Valve, who is best known for the PC distribution market known as Steam is also anticipated to come into the mix. And for a long shot possibility, the likes of Apple (AAPL) could go in their as well if their supposed Apple TV ever gets produced.
So if your thinking of purchasing video game stocks, now is the time to buy. A few more days of this "Fiscal Cliff" debacle, will inevitably create more pessimistic momentum. The unfortunate tragedy in Newtown also hurt not only gun stocks but video game stocks as well when media opinion journalists and the NRA partly blamed violent Hollywood and video game industry for the tragedy.
Once all this downward sentiment subsides, I will be buying video game stocks. ATVI and NTDOY as well as TTWO are my plays. I'm especially looking for a nice momentum pickup on TTWO in 2013 when Grand Theft Auto 5 comes out.
This stock is an enigma. Its price had already fallen before the Newtowne shooting. Gamers dont wait years by postponing purchases due to the possibility of a new cheaper console. They are impulse buyers like everyone else. Analysts cant be wrong as much and long as you suggest. The only explanation for this pig's performance is that their parent,Vivendi, siphons off the earnings because they arent an SEC monitored company. And the SEC doent think they owe the 39% minority shareholders any protection. SAD!