Find The Best Stocks With Perfect Trade Setups In Minutes A Day

Stop wasting time looking for the right stocks.  Free training on how to find perfect stock trades that can move 300-1,500%.  Learn the # 1 key to successful stock investing and how to find success even If the market is crashing, rebounding… or just going sideways. (ad)

Do Not Delay - Click Here Now

 

The Charts Of These 2 Videogame Stocks Look “Constructive” Now – Should You Buy?

Videogame stocks have struggled this year, but 2 stocks in the sector look attractive now.

Much like the rest of the market, videogame stocks have had a wild ride this year.

The ESPO VanEck Vectors Video Gaming and eSports ETF had risen 12.5% by February 19, then fell with the rest of the market dropping nearly -22% by March 16. The ETF, which tracks some the biggest names in the space, has since risen just over 28%. 

Despite this gain, the ETF is up just 4.5% year-to-date, illustrating how big-name gaming stocks have struggled to make meaningful moves higher this year.

Call of Duty-maker Activision Blizzard (NASDAQ: ATVI) is up just 1.75% this year, while Grand Theft Auto-publisher Take-Two Interactive (NASDAQ: TTWO) is down -2.5% since the beginning of the year. 

But this week, Wells Fargo analyst Brian Fitzgerald initiated coverage of these stocks, giving both Overweight ratings. 

According to Fitzgerald, Activision Blizzard “offers investors exposure to long-term secular growth trends in the global video game markets via a portfolio of seasoned franchise with tens of millions of loyal fans.”

“These include ‘Call of Duty’ which topped the AAA video game best-seller charts in the U.S. for five of the past six years, and ‘Candy Crush’ which is one of the top five grossing movie games of all time,” Fitzgerald wrote in a note. “We think ATVI’s four strategic growth pillars and wholly owned-IP are the right recipe for relatively low-risk growth in a frequently unpredictable, hit-driven video game market.”

Fitzgerald, who has a $75 price target on Activision shares, indicating 24% upside ahead, added that the company “has demonstrated success in expanding the market for its IP with ‘Call of Duty Mobile’ and Overwatch League eSports, two new businesses that can bring hundreds of millions of new gamers and viewers into ATVI’s ecosystem.”

As for Take-Two, Fitzgerald issued a $150 price target for the stock—nearly 26% higher than the current price—and said the company “could be the last mega-product cycle story available among Video Game stocks.”

“At $7B lifetime sales & counting, (‘Grand Theft Auto V’), released in 2013, is the top selling video game of all time, and potentially the most lucrative media product ever created,” Fitzgerald wrote. “We think a successful release of GTA VI would raise the steady state level of net bookings at TTWO by 33-50%, with significant OpEx leverage boosting operating income through the $600MM ceiling.”

But Fitzgerald isn’t the only one on Wall Street with their eyes on these videogame stocks.

“More people are staying at home, they’re looking for entertainment and options at home, and with the client base that these two companies already have, I think this is going to be fantastic for them,” said Danielle Shay, director of options at Simpler Trading. “I think that the run into earnings at the end of this month is going to be a bullish one.”

Ascent Wealth Partners’ managing director Todd Gordon added that Activision’s and Take-Two’s charts show the stock is “well-supported.”

According to Gordon, Activision shares are “above both moving averages” on its weekly chart, suggesting there’s less risk that the stock will fall through those levels. 

ATVI Weekly Chart. Source: TradingView.

Gordon added that ATVI’s daily chart shows similarly supportive action, trading above both its 50- and 200-day moving averages.

ATVI Daily Chart. Source: TradingView.

“Activision’s the bigger of the two,” Gordon continued. “It’s a $46 billion market cap. They’ve got franchises like Call of Duty and Candy Crush. They have a better share of mobile gaming. Activision is well-represented across multiple platforms including PC, console, gaming, stuff like that. So, we hold Activision in our global growth portfolio.”

Still, Gordon said Take-Two is also a “solid pick.”

“I really like this longer-term chart. It’s a smaller company, $14 billion market cap,” Gordon noted. “It’s got Grand Theft Auto, one of the best-selling video game franchises of all time. Wells Fargo’s looking at, possibly, a release of GTA VI, which is interesting, so, they’re putting about another $4 billion in net bookings on that one. So there’s a little bit of a premium in Take-Two.”

TTWO Weekly Chart. Source: TradingView.

“I like the chart,” Gordon concluded. “We don’t hold this one personally, but I would look to add following the break higher.”

By the way, if you liked this article, you'll LOVE this Meaty free training I just published on the top 3 questions and challenges every investor faces AND how to overcome them. It's titled "10k into $2.4 Million in 18 months" and you can grab it for free here

There are risks inherent in all investments, which may make such investments unsuitable for certain persons. These include, for example, economic, political, currency exchange, rate fluctuations, and limited availability of information on international securities. You may lose all of your money trading and investing. Do NOT enter any trade without fully understanding the worst-case scenarios of that trade. And do NOT trade with money you cannot afford to lose. Past performance of an investment is not necessarily indicative of its future results. No assurance can be given that any implied recommendation will be profitable or will not be subject to losses. Information provided by the Company is not investment advice. The Company is not a registered investment adviser, stock broker, or brokerage. You agree that the Company does not represent, warrant, or take responsibility that any account will or is likely to achieve profit or losses similar to those shown. Examples published by the Company are selected for illustrative purposes only. They are not typical and do not represent the typical results of all stocks within the Company’s software or its individual scans and searches. No independent party has audited any hypothetical performance contained at this Web site, nor has any independent party undertaken to confirm that they reflect the trading method under the assumptions or conditions specified.

FREE TRADING WEBINAR - TRADERSPRO PRESENTS: Starting With Only $10,000 Retire With $2.4 Million? Click Here Now

Join Us Now
X