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Electronic Arts Inc. (ERTS) Message Board

  • monkabc3 monkabc3 Nov 1, 2012 1:54 PM Flag

    How it really is

    One of the two largest entertainment/gaming companies in the world. Consistently producing $4 billion in revenue annually and growing. Has a sports gaming monopoly. Has a growing sports fan base. Diversifies itself with FPS, RPG, Racing, Social, Mobile games. Successfully transitioning to digital. Continually creating new IP to distribute for their multiple platform user base, Mass Effect, Dragon Age, MOH, Crysis, Dead Space, Need For Speed, Star Wars, The Sims, Sim City, etc..

    Stock price trading at an ALL TIME LOW due to external contributors (Zynga fad hype crushed gaming sector, Consoles waiting one to many years before next release), internal contributor "WOW crushing MMORG - Star Wars" Hype. Two months ago we were back in 1995! How ridiculous is that for a company whose balance sheet and income statement hasn't changed for years?

    Overtly-delayed new console cycle approaching fast. What is the stock price going to be at when MS and Sony announce their next gen console at E3 in the spring? What is the stock price going to be when the new consoles, which EA said they are tossing $80 million at in R&D, are release for new year's Christmas season? $12.50? Do you sell a successful company when it is trading at an all time low or do you buy it? Are money managers out their looking for a 1 month 10% pop or are they looking at a 100% 12 month return for their clients? Technicals - Low forward P/E multiple, positive cash holdings, generating non-gaap income, successful $300 million share buyback followed by proposed $500 million share buy back. This isn't rocket science.

    Personally, I would say that the video gaming industry is a recession proof business. 2 hours for $50 for movies for a family, 120 hours for $60 for a video game. Not to mention, gamers will go without food vs. not playing a new hot title.

    EA stock going up or down? What do you think?

    Sentiment: Strong Buy

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