PSJ - Invesco Dynamic Software ETF

NYSEArca - NYSEArca Delayed Price. Currency in USD
104.07
+0.94 (+0.91%)
At close: 3:59PM EST
Stock chart is not supported by your current browser
Previous Close103.13
Open103.80
Bid0.00 x 800
Ask0.00 x 900
Day's Range103.60 - 104.20
52 Week Range79.28 - 104.38
Volume31,125
Avg. Volume41,123
Net Assets499.09M
NAV104.11
PE Ratio (TTM)N/A
Yield0.05%
YTD Daily Total Return4.30%
Beta (5Y Monthly)1.10
Expense Ratio (net)0.58%
Inception Date2005-06-23
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  • 7 Scorching Software ETFs
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    7 Scorching Software ETFs

    [Editor's Note: This article was originally published on July 26, 2018, and was updated on July 30, 2019, with the most recent information.]Investors looking for industry-level attribution for the technology sector's strength should not look past software. Simply put, among technology exchange traded funds (ETFs) this year, software ETFs are represent sources of strength.Source: Shutterstock This is one nugget cementing the strength of software ETFs: the S&P North American Technology-Software Index as measured by the iShares Expanded Tech-Software Sector ETF (BATS:IGV) is up 32% year-to-date while the tech-heavy Nasdaq-100 Index is up 25.8%. However, investors will pay up for the privilege of owning software stocks and ETFs.InvestorPlace - Stock Market News, Stock Advice & Trading Tips"As a group, software companies enter the second-quarter earnings period trading at record valuations," according to Barron's. "Macquarie Capital analyst Sarah Hindlian finds that the average software stock is trading for a record 7.1 times next fiscal year's projected revenues. The one-year average valuation on that basis is 5.6 times, she reports. The five-year average is 4.4 times and the 10-year average is 3.9."Adding to the bull thesis for software ETFs are robust revenue expectations across a wide array of software platforms, including cloud, cybersecurity, customer relationship management (CRM), internet applications and video games. * 7 Stocks to Buy With Over 20% Upside From Current Levels Investors can participate in this corner of the technology sector with the following software ETFs. iShares North American Tech-Software ETF (IGV)Expense Ratio: 0.47% per year, or $47 on a $10,000 investment.The iShares North American Tech-Software ETF is one of the largest, oldest and most traditional software ETFs. Home to over $2.8 billion in assets under management, IGV tracks the aforementioned S&P North American Technology-Software Index, cap-weighted software gauge dominated by the industry's largest players.Just four stocks -- Salesforce.com (NYSE:CRM), Microsoft (NASDAQ:MSFT), Adobe Systems (NASDAQ:ADBE) and Oracle (NYSE:ORCL) -- combine for over a third of this software ETF's weight. Those are the breaks with industry and sector funds that are weighted by market capitalization, but investors probably are not complaining about IGV's 32% year-to-date gain.Assuming software stocks maintain their leadership perch in the technology sector, this will be the fourth year in the past five that IGV has outpaced the broader XLK.The potential quibble with IGV is that its price-to-earnings ratio is over 40, implying a significant premium relative to broader technology funds. SPDR S&P Software & Services ETF (XSW)Expense Ratio: 0.35%For investors looking for a software ETF that is not heavily dependent on the industry's large- and mega-cap names, the SPDR S&P Software & Services ETF (NYSEARCA:XSW) is a suitable alternative. This software ETF is an equal-weight fund and none of its 159 holdings commands a weight north of 1%.XSW's top 10 holdings combine for just 9.2% of the fund's weight. This software ETF is up 35% year-to-date, indicating its tilt toward smaller software stocks is rewarding investors. While it is not driven by the industry's largest names, its P/E ratio of 25 is more attractive than IGV's. * 7 Semiconductor Stocks to Buy for Your Inner Geek The XSW ETF also boasts gains of 19% in the last year, 25% in the past three years and 17% in the past five years. Invesco Dynamic Software ETF (PSJ)Expense Ratio: 0.63%The Invesco Dynamic Software ETF (NYSEARCA:PSJ) is another example of a software ETF with an alternative weighting methodology. PSJ follows the Dynamic Software Intellidex Index.That index "is designed to provide capital appreciation by thoroughly evaluating companies based on a variety of investment merit criteria, including: price momentum, earnings momentum, quality, management action, and value," according to Invesco.Implementation of those factors results in a lineup of just 30 stocks, a far smaller roster than IGV of XSW have. PSJ is up over 40% this year, due in part to contributions from the likes of Microsoft and Salesforce. Said another way, PSJ is not just one of the best software ETFs, but one of the best tech industry ETFs of any stripe in 2019.While this software ETF allocates over 81% of its weight to growth stocks, its annualized volatility has only been slightly higher than the Nasdaq-100 Index's over the past three years, a period in which PSJ has trounced that benchmark. ETFMG Prime Cyber Security ETF (HACK)Expense Ratio: 0.6%The ETFMG Prime Cyber Security ETF (NYSEARCA:HACK) is not a pure software ETF, but software is a significant part of the broader cybersecurity spectrum.HACK tracks the Prime Cyber Defense Index, which is "comprised of companies that offer hardware, software, consulting and services to defend against cybercrime," according to the issuer.Over 62% of HACK's holdings are software companies, split among the systems and internet software industries. HACK has the potential to be a dominant name over the long term. * 7 Oversold Stocks To Buy Right Now Just three years ago, cybersecurity attacks resulted in damages of $3 trillion, but that number could jump to $6 trillion by 2021, meaning companies and governments will be spending in a big way on warding off cyber threats. HACK and cybersecurity stocks were pinched by the China trade conflict as highlighted by a big May-June decline that has the fund up "just" 23% this year. ETFMG Video Game Tech ETF (GAMR)Expense Ratio: 0.74%Hardware is part of the conversation when discussing video game investing, but the ETFMG Video Game Tech ETF (NYSEARCA:GAMR) is a credible software ETF, as it has significant holding overlap with more traditional software ETFs. In fact, some of GAMR's top 10 holdings, including Take-Two (NASDAQ:TTWO), are top 10 holdings in other such funds.Past performance is never a guarantee of future returns, but it cannot be ignored that GAMR has more than doubled over the past three years. Plus, this software ETF has a plethora compelling future catalysts that could signal its run still has momentum. Digitalized gaming is one of those catalysts."The percentage of digitally downloaded video games rose from 31% in 2010 to 74% in 2016," according to GAMR's issuer. "This is expected to climb to nearly 93% by 2021."GAMR looks more attractive today than when we first ran this piece a few months by virtue of an almost 18% decline off its 52-week high. Investors interested in this fund may want to wait for it snap out of its recent funk. Global X Future Analytics Tech ETF (AIQ)Global X Funds logo. (PRNewsfoto/Global X Funds)Expense Ratio: 0.68%The Global X Future Analytics Tech ETF (NASDAQ:AIQ) is one of the newest additions to the software ETF fray, having debuted in 2018. AIQ follows the Indxx Artificial Intelligence & Big Data Index.This is not a pure software fund, but there are myriad intersections between the artificial intelligence and big data themes and software. Several of AIQ's top 10 holdings, including Microsoft and Adobe, reside in more pure, traditional software ETFs. Ovearll, more than 51% of AIQ's 83 holdings are classified as software companies. * 7 Stocks to Sell This Summer Earnings Season AIQ is a little over a year old and is on a torrid pace this year with a gain of 32%. First Trust Cloud Computing ETF (SKYY)Expense Ratio: 0.6%It is just one example, but one reason why shares of Microsoft are up almost 40% this year is the cloud computing boom. Cloud computing is also powering another company you've probably heard of -- Amazon (NASDAQ:AMZN). For the investors who do not want to stock pick among cloud names, the First Trust Cloud Computing ETF (NASDAQ:SKYY) is the idea to consider.SKYY is not a dedicated software ETF, but if you combine the fund's exposure to traditional and internet software purveyors, the figure is north of 54%. Like some of the other funds mentioned here, SKYY has significant long-term potential."The widespread adoption of cloud-based software is shifting the dynamics of the software industry, spreading the reach of enterprise-class applications to smaller businesse and reducing the costs involved in creating, selling, and supporting applicatios," according to Barron's.The worldwide public cloud services market is projected to grow 17.5% in 2019, and according to Sid Nag, research vice president at Gartner, "Through 2022, Gartner projects the market size and growth of the cloud services industry at nearly three time the growth of overall IT services."Todd Shriber does not own any of the aforementioned securities. 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  • Until a Turnaround Is Underway, Activision Stock Is a Bad Bet
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    Until a Turnaround Is Underway, Activision Stock Is a Bad Bet

    Activision Blizzard (NASDAQ:ATVI) is one of the most important video-game makers, as it owns some of the biggest game franchises. Although Activision stock hasn't had a good run recently, that quickly could change.Source: Shutterstock ATVI is expected to report its quarterly earnings on Aug. 8.I would not bet against the future of ATVI stock; but, in the short-term, I am not very optimistic on Activision Blizzard's strategy and pipeline, especially given the industry's latest developments. Therefore, between now and Aug. 8, I expect to see Activision stock exhibit further volatility and, possibly, price weakness.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Semiconductor Stocks to Buy for Your Inner Geek The State of the Gaming IndustryThe success of mobile gaming, which accounts for half of all gaming revenue, is one of the most important drivers behind the growth of the industry.Although the video-game market has been growing rapidly in recent years, 2019 has not been a good year for the industry so far. Analysts have cited multiple headwinds, including the fact that China is now enforcing strict regulations on games, and the huge popularity of free-to-play games.For example, Fortnite, an apocalyptic survival video game developed and marketed by the privately held Epic Games, generated $2.4 billion of revenue last year, more than any other single game in 2018. The free-to-play game has become a worldwide favorite of gamers of all ages and has taken the wind out of other established studios' sales.ATVI earnings, as well as those of major industry players like Electronic Arts (NASDAQ:EA) and Take-Two Interactive (NASDAQ:TTWO), have suffered because of Fortnite's success.But industries that are growing quickly, including the video-game sector, inevitably attract a great deal of competition. The owners of Activision Blizzard stock are not exactly sure how it can succeed against these competitors and which new game titles the company will use to increase its revenue.Activision Blizzard is currently reliant on its video-game franchises, and unless ATVI's business model adapts to the dynamic shifts in the industry, its revenue may not grow for many quarters to come. What to Expect from ATVI's Q2 ResultsBefore Activision Blizzard reported its Q1 earnings in May, Wall Street was hoping to see the company dispel fears of Fortnite and other competition.However, the results left some investors disappointed as the company's monthly active users (MAUs) steadily declined during the quarter, possibly indicating that Fortnite has been luring more users away from ATVI. Activision has also encountered meaningful competition from Apex Legends, another free-to-play game launched by Electronic Arts in February.During the quarter, ATVI's MAUs hit their lowest level since Q1 of 2016. Therefore, when ATVI releases its Q2 earnings report, investors will likely carefully analyze this metric.Even though ATVI's Q1 results beat analysts' average expectations, its revenues fell year-over-year. The company's Call of Duty: Black Ops 4 game has done well; however, its Destiny franchise has been underperforming.Finally, Activision Blizzard's guidance for the rest of the year was also less than impressive. It expects its 2019 revenue to be $6.025 billion, down from $7.5 billion in 2018. Analyst Worries and Activision StockAnalysts have also been concerned about the impact of the departures of several high-ranking Activision executives. Meanwhile, Activision Blizzard is continuing to bet big on eSports, and investors are hoping that the company's growing eSports fan base will enable it to boost its results, raising ATVI stock.Going forward, analysts believe eSports will become a major disruptive force, with a market that will exceed $1 billion this year and a 26.7% year-over-year revenue surge. However, eSports haven't moved the needle for Activision stock yet.In May, the company highlighted that, on average, players were spending about 50 minutes a day on ATVI's games. Analysts are likely to pay attention to any major changes in this number.Most investors are likely to wait on the sidelines until they have had a chance to analyze the company's updated balance sheet on Aug. 8. Unless the company's numbers and its 2019 guidance are exceptional, investors may decide not to invest in ATVI stock for several more weeks or months. Where Is ATVI Stock Now?Despite the stock market's rally in 2019, Activision stock is little-changed this year while the stock price of Electronic Arts, one of ATVI's main competitors, is up 11%.ATVI's current share price of about $47 is still under its 200-day moving average, which is about $49.While long-term investors would like to see ATVI stock price go over the $50 level, traders are likely to keep the range between $42.50 and $47.50. Ultimately, ATVI stock price will need to stabilize and build a base again before a long-term sustained leg up can occur.The current share price assumes that most of the bad news has already been baked into ATVI stock.Investors who already own ATVI stock may want to hold onto their positions. However, they may consider placing a stop loss at about 3%-5% below the current price.Experienced options buyers may also consider using a covered call strategy with Aug. 16 or Sept. 20 expiration dates. Such a hedge would offer both downside protection in case of volatility and a decline of Activision while allowing investors to benefit from any gains of ATVI stock.After the upcoming earnings call, investors who still believe in the bull case for Activision might consider waiting for a better time to buy ATVI stock, such as when the price is around the low $40's or even the high $30's. The Bottom Line on Activision StockWith its strong franchises, Activision Blizzard is an important company that is likely to succeed despite the industry's headwinds. The digital-gaming revolution is here to stay, and I believe the long-term fundamental outlook of ATVI stock is still upbeat.However, it may take several more quarters before ATVI's revenue resumes growing, enabling ATVI stock price to rebound.Investors who are interested in companies in the interactive software or entertainment sectors but do not want to commit all their capital to a single stock such as ATVI may also consider investing in various exchange-traded funds (ETFs) that have Activision Blizzard as a holding.Examples of such funds include the Invesco Dynamic Software ETF (NYSEARCA:PSJ), the VanEck Vectors Video Gaming and eSports ETF (NYSEARCA:ESPO) and the Communication Services Select Sector SPDR (NYSEARCA:XLC).As of this writing, Tezcan Gecgil did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 5G Stocks to Connect Your Portfolio To * 7 Stocks to Sell This Summer Earnings Season * 6 Upcoming IPOs for July The post Until a Turnaround Is Underway, Activision Stock Is a Bad Bet appeared first on InvestorPlace.

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    5 High-Fee ETFs Worth Buying Despite Hefty Expense Ratios

    It is not up for debate that one of the primary selling points of exchange-traded funds (ETFs) is low fees. Earlier this year, Morningstar said investors saved $5.5 billion last year due to declining fund fees, including ETFs."The study found that across U.S. funds, the asset-weighted expense ratio dropped to 0.48% in 2018, compared to 0.51% in 2017," according to Morningstar. "As a result, investors saved an estimated $5.5 billion in fund fees in 2018. This 6% percent year-over-year decline is the second largest recorded since Morningstar began tracking asset-weighted fees in 2000."In more good news for ETF investors, fees are falling. As part of their efforts to lure investors, fund sponsors are continually lowering expense ratios on ETFs, some to rock-bottom levels, or in some cases, no fees at all.InvestorPlace - Stock Market News, Stock Advice & Trading TipsA byproduct of all these cheap ETFs on the market is that investors frequently think that the cheapest funds are the best funds. While fees certainly are a meaningful consideration for long-term investors, there are cases where higher-priced ETFs merit those higher fees.Consider the following, hypothetical example. ETF "A" and ETF "B" both track tech stocks. ETF charges 0.50% per year, or $50 on a $10,000 investment, while ETF "B" charges 0.10%. Over the past five years, ETF "A" is up 100% while ETF "B" is up just 50%. Simple math says ETF "A" was the better ETF to buy despite its higher fee. * 7 Dark Horse Stocks Winning the Race in 2019 Here are some higher fee ETFs to buy that earn those expensive expense ratios. Cambria Shareholder Yield ETF (SYLD)Source: Shutterstock Expense ratio: 0.59% per year, or $59 on a $10,000 investment.There are plenty of inexpensive dividend ETFs on the market today and most of the funds that are dedicated to the buyback theme are not really expensive, either. However, the Cambria Shareholder Yield ETF (CBOE:SYLD) has a unique approach to shareholder rewards that merits paying up for.This ETF to buy has nearly $105 million in assets under management and tracks the Cambria Shareholder Yield Index. That benchmark is "comprised of the 100 companies with the best combined rank of dividend payments and net stock buybacks, which are the key components of shareholder yield," according to Cambria.With SYLD, investors are also getting multi-factor exposure because many of its holdings are considered to be quality and/or value stocks. This ETF to buy devotes nearly 53% of its weight to the financial services and consumer discretionary sectors. First Trust North American Energy Infrastructure Fund (EMLP)Source: Shutterstock Expense ratio: 0.95%There are master limited partnership (MLPs) with higher fees than the First Trust North American Energy Infrastructure Fund (NYSEARCA:EMLP) and there are some with lower fees. On a standalone basis, EMLP's annual expense ratio is high relative to the broader universe of passively managed ETFs and actively managed mutual funds. This ETF to buy is an active fund.Simply put, this ETF to buy earns its above-average fee because, even through some trying times for the energy sector, EMLP delivers performance. Over the past three years, EMLP is up 19.40%, dominating a slew of cheap MLP and broader energy sector funds along the way. * 6 Chinese Stocks to Sell That Are Suffering From a Digital Ad Slowdown Credit the active management behind the fund. Moreover, EMLP's risk-adjusted returns over those three years are stellar as the fund has displayed significantly less volatility than rival MLP and energy ETFs during that period. VanEck Vectors Preferred Securities ex Financials ETF (PFXF)Source: Shutterstock Expense ratio: 0.41%To be fair, the VanEck Vectors Preferred Securities ex Financials ETF (NYSEARCA:PFXF) is cheaper than all but one preferred stock ETF, but this ETF to buy is considerably pricier than traditional bond funds. Regardless of how investors view PFXF's expense ratio, this is an ETF to buy because it is one of the best options in this particular asset class.Over the past three years, PFXF has beaten the largest preferred ETF by 410 basis points and for yield-hungry investors looking for more flair with their fixed income offerings, PFXF topped the Bloomberg Barclays Aggregate Bond Index by wide margins over those three years despite carrying a higher fee than funds tracking that bond benchmark.PFXF holds 117 preferred stocks and has 30-day SEC yield of 5.71%, giving it a better income profile than a slew of cheaper government and investment-grade corporate bond ETFs. Invesco Dynamic Software ETF (PSJ)Source: Shutterstock Expense ratio: 0.63%Domestic sector funds are inexpensive. Some sector ETFs even have annual fees of just over 0.08%, but when it comes to industry funds, such as those tracking software stocks, investors should expect to pay more. However, the Invesco Dynamic Software ETF (NYSEARCA:PSJ) is pricey compared to the broader universe of domestic equity sector funds.Still, this is an industry ETF to buy for tech investors. PSJ's underlying index uses a unique methodology that "is designed to provide capital appreciation by thoroughly evaluating companies based on a variety of investment merit criteria, including: price momentum, earnings momentum, quality, management action, and value," according to Invesco. * 4 Technology Stocks Blasting Higher Here are three factors making PSJ an ETF to buy: 1) over the past three years the fund has trounced broader technology ETFs and the Nasdaq-100 Index 2) PSJ has a five-star Morningstar rating 3) the return on equity of PSJ's components is a stellar 36.61%. ProShares S&P MidCap 400 Dividend Aristocrats ETF (REGL)Source: Shutterstock Expense ratio: 0.40%The ProShares S&P MidCap 400 Dividend Aristocrats ETF (CBOE:REGL) is by no means alarmingly expensive. It is merely pricey compared to basic, passively managed index funds that track the S&P MidCap 400 Index. That is not surprising because dividend funds are usually more expensive than basic cap-weighted equity strategies.REGL follows the S&P MidCap 400 Dividend Aristocrats Index, which mandates that member firms have boosted payouts for 15 consecutive years. The strategy is a winner. Over the past three years, this ETF to buy has outperformed the S&P MidCap 400 by nearly 200 basis points with less volatility.Adding to REGL's ETF to buy status, the fund ranks No. 2 in Morningstar's universe of 373 mid-cap value funds. REGL allocates 46.60% of its weight to financial services and industrial stocks.Todd Shriber does not own any of the aforementioned securities. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 Dark Horse Stocks Winning the Race in 2019 * 6 Chinese Stocks to Sell That Are Suffering From a Digital Ad Slowdown * 4 Technology Stocks Blasting Higher Compare Brokers The post 5 High-Fee ETFs Worth Buying Despite Hefty Expense Ratios appeared first on InvestorPlace.

  • Software ETF (PSJ) Hits New 52-Week High
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  • Has Electronic Arts Stock Price Hit Its Peak For 2019?
    InvestorPlace

    Has Electronic Arts Stock Price Hit Its Peak For 2019?

    As a leader in the competitive video game industry, Electronic Arts (NASDAQ:EA) develops and distributes esports games. In 2013, EA stock was trading at just over $10.Source: Shutterstock Over the next few years, it became a darling among long-term investors. Then Electronic Arts stock had a rough second half of the year in 2018. And in 2019, although EA stock is up 19%, it has been a roller coaster ride.EA stock's 52-week price range has been between $151.26 (July 13, 2018) and $73.91 (Dec. 26, 2018). Despite the price strength this year, I don't think long-term investors should rush to buy into the shares just yet. Electronic Arts will report earnings on May 7, giving Wall Street a better gauge of the financial health of the company. While I would not bet against EA stock's future, I expect to see further volatility and possible price weakness in Electronic Arts stock in May. Let's take a closer look why.InvestorPlace - Stock Market News, Stock Advice & Trading Tips EA Stock Faces More CompetitionThe global gaming market has been growing at a rapid rate and is expected to exceed $180 billion in revenues in 2021. Analysts believe esports will become a major disruptive force, with a market that will exceed $1 billion this year and with a revenue increase of 26.7% year-over-year. Most of the revenues for the companies in this segment currently come from North America and China. * 7 Dividend Stocks That Could Double Over the Next Five Years Such a growth industry inevitably attracts global competition. For example, Fortnite, an apocalyptic survival video game developed and marketed by the privately held Epic Games, generated $2.4 billion in sales last year, more than any single game in 2018. This free-to-play game has become a worldwide champion among gamers of all ages. Free-to-play games allow casual gamers to get a taste of the industry, especially among low-income players both in developed economies and emerging markets, such as China and Russia.Electronic Arts is currently franchise-reliant, whereas competition like Fortnite tends to focus on video game volume. EA's top franchise titles include FIFA Online, SimCity, The Sims and Battlefield. Each of these titles generates stable yet not-necessarily impressive sales. In other words, if EA's core franchises were to lose popularity, the company would face fiscal and market consequences and the EA share price would suffer.And that's exactly what happened following its most recent earnings release on Feb. 5 when Electronic Arts disappointed the Street with lower-than-expected sales for Battlefield V. The group blamed the game's late launch date as well as the fact that the title also lacked a multiplayer battle royale mode.Investors were not thrilled to hear about shortfall or the blame game. As a result, EA stock plunged by 13%. The numbers confirmed that Fortnite took users from other games, including EA's historical franchises.But then on Feb. 8, Electronic Arts stock surged more than 9% when the company announced the surprise release of a new free-to-play, battle royale game, Apex Legends, which investors now hope may ultimately rival Fortnite. As of mid-March, about 50 million players had already dived into Apex.However, Wall Street still has question marks as to whether Electronic Arts can maintain sustained growth since Apex Legends is entering an already-saturated and competitive market. Will EA be able to make any sizable profit from this game by monetizing the premium in-game content? Electronic Arts Stock and Earnings Season WorriesEA is one of the largest gaming companies globally in terms of revenue and market cap. The group has two key sources of revenues: * Products (i.e., digital or physical sale of games and additional content); and, * Services (i.e., recurring revenue sources such as subscription-based models and in-game transactions).In-game transactions which include "microtransactions" (such as new player skins or weapons) and "loot boxes" (whose contents players do not know prior to purchase) are lucrative yet somewhat controversial sources of revenue. Indeed, many gamers resent the idea of spending more money on games which they have already bought.The gaming giant reports sales by platforms: * PC and other (about 15% of sales); * Console (about 70% of sales); and, * Mobile (about 15% of sales).Although consoles contribute the most to the revenue, mobile is the fastest-growing segment. Globally, mobile accounts for more than half of the revenues in the industry.Apex Legends is only available to play on console and PC right now. However, Fortnite supports cross-platform play, including mobile devices. Therefore, unless Apex Legends becomes available on mobile to, its momentum and growth might be limited.In its February earnings report, Electronic Arts highlighted challenges for 2019 and decreased its revenue outlook for the year to $4.875 billion from a prior $5.15 billion. Similarly, the stock price of Activision Blizzard (NASDAQ:ATVI), one of EA's main competitors, has also suffered so far in 2019, mostly due to the competitive headwinds in the industry.In other words, Electronic Arts stock holders as well as investors in other entertainment and gaming stocks are nervous about each of these companies not being able to dispel fears of Fortnite and other competition. In an industry that offers both free-to-play titles and full-price games, what will be the right mix of business models for Electronic Arts?Most investors are likely to wait on the sidelines until they have a chance to analyze EA's balance sheet to see if the shares might be somewhat overvalued. They will also want to see if there is any growth fatigue or major trend changes in the industry.Unless the numbers and the rest of the 2019 guidance are exceptional in May, EA stock investors may decide not to invest in the stock for several more weeks -- or even months. Should Investors Buy EA Stock Ahead of Earnings?Electronic Arts stock is momentum-driven, hence it usually experiences big price swings after reporting earnings. In other words, it can easily gap up if the numbers are better than expected, or if the numbers disappoint, the stock can easily gap down, too. * 7 Cloud Stocks to Buy Now The stock's beta is 1.14, which means its volatility on average is 14% higher than that of the broader market. Therefore, if the industry or the overall market declines as other companies release earnings, the EA stock price may also be adversely affected.If you already own EA stock, you might want to hold your position. However, within the parameters of your portfolio allocation and risk/return profile, you may consider placing a stop loss at about 3%-5% below the current price point.After the upcoming earnings call, in case of a price drop, if you still believe in the bull case for Electronic Arts stock, then you might consider waiting for a better time to buy, such as when the share price is around the high $80's, or even lower.If you are an experienced investor in the options market, you may also consider using a covered call strategy with approximately a five-week time horizon. In that case, you may, for example, buy 100 shares of EA at a limit price of $94.47 (the closing price on April 26) and, at the same time, sell a EA May 31 $94.5 call option, which currently trades at $5.05 and offers downside protection in case of volatility and a decline in Electronic Arts stock. This call option would stop trading on May 31, 2019, and expire on June 1. The Bottom Line on Electronic Arts StockGame publishing is a risky and evolving business. With its strong franchise focus, EA is an important company that is likely to weather the ebbs and flows of the industry. The rise of the digital gaming revolution is here to stay, and I believe the long-term fundamental story of Electronic Arts stock is still intact. However, I would not advocate bottom-picking in case of near-term price weakness during a subdued earnings season in May.Investors who are interested in companies in the interactive software, entertainment or communication services but do not want to commit all their capital to a single stock such as EA may also consider investing in various exchange-traded funds (ETFs) that have Electronic Arts as a holding. Examples of such funds would include the the VanEck Vectors Video Gaming and eSports ETF (NYSEARCA:ESPO), which has EA stock as 5.74% of its 26-stock holdings. Electronic Arts stock is also among the top 20 holdings in the Invesco Dynamic Software ETF (NYSEARCA:PSJ) and the iShares Expanded Tech-Software Sector ETF(CBOE:IGV).As of this writing, Tezcan Gecgil did not hold a position in any of the aforementioned securities. More From InvestorPlace * 7 A-Rated Stocks That Are Under $10 * 7 U.S. Shale Oil Stocks to Buy as Prices Rise * 10 Stocks to Sell Before They Give Back 2019 Gains * 10 Oversold Stocks to Run From Compare Brokers The post Has Electronic Arts Stock Price Hit Its Peak For 2019? appeared first on InvestorPlace.

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