Electronic Arts Inc (EA)

Can't tell its short-term prospects. They've been struggling, but in videogames he prefers Activision Blizzard (ATVI-Q) that he owns; they make the best games. They're getting into the battle royale market with new games. All videogame companies have been under a cloud because of this Fortnite controversy. He expects a 20% in ATVI in the next year.

He's fascinated by the potential in e-sports. Everybody around the world loves videogames, even watching people play them. The problem is it's a hit and miss business, either launching a blockbuster or a dud. But he's interested and
tracking this industry closely. The runway is long.

One of the real big 3 or 4 companies in video gaming space. Well run company. It is expensive. There are some potential disruptors. This is a growth sector. Electronic Arts is 1 of the leaders. If own, would hold, but the easy money has been made.

Had his eye on this for some time, but it has run away from him. If buying at these levels, he would caution you to have at least a minimum 5-year time horizon. They’ve done a tremendous job. Video games are not going away. However, this company has had quite a run. Wait for a pullback, or else be mentally prepared to own it for at least greater than 5 years.

Sell Take-Two Interactive Software (TTWO-Q) or Electronic Arts (EA-Q)? Why not just sell half of each? Looking at the math, it looks like they both could go higher. They are trading at the same valuation relative to BV.

You go out and spend extra money to get an extra weapon and you win at the video game. It is cheap on a multiple basis. He thinks there is more sex appeal coming with FIFA. The company is growing. (Analysts’ target: $130.00).

He really likes the video game space. You make money if you find a company or industry that is perceived to be good to begin with, but where there is some change that has taken place that allows them to take their business to a whole different level. It used to be that you would buy a disc to upgrade a videogame. Now you download a game, and you are in the heat of a battle, and you pay extra for another weapon. Their ability to generate cash from their properties has gone markedly upward. So, the multiple you pay for that business should expand. Not only are earnings growing, but the multiple of earnings that people are willing to pay is growing.

(A Top Pick Dec 3/15. Up 19.53%.) Sold his holdings. They have done a really good job in moving from the console games to the more digital games. They’ve partnered with Disney (DIS-N) to use Star Wars games. Not a bad name at 22X earnings.

(A Top Pick July 9/15. Up 9.12%.) He likes this whole group. There is a secular trend there.

(Market Call Minute.) Sold his holdings recently. He likes the business long-term, but in the near term valuations got a bit up there, and it started to peak a little.

(A Top Pick July 9/15. Up 5.7%.) Makes and distributes video games. This is a place where people are willing to spend disposable income. Technically, the price it is trading at right now, is very close to breaking out to new highs. It has been consolidating for about a year. This is still a Buy. You could also look at Take-Two Interactive (TTWO-Q).

Just sold his holdings about a week ago on its move higher based on strong earnings. He likes the name. Their partnership with Disney (DIS-N) and the Star Wars franchise makes a lot of sense. They are making a good transition from the console to the mobile space. He sold because he wants start moving away from higher beta names. Loves the company and the name and could buy it back later on.

Likes consumer discretionary, as well as leisure which is a part of that group. This company is interesting. Take-Two Interactive (TTWO-Q) is acting a little bit better, but this one is likely to do quite well also.

This owns the licensing for the gaming side of Star Wars, and there was a lot of hype. Stock hasn’t done horribly, but it was felt that the big pop in numbers had been had. Any time a company says that the best is over, the stock can tail off. He likes the space. He would suggest you look at Take Two Interactive (TTWO-Q), which has a slightly different take on it, but are firing on all cylinders and the franchise is in great shape.

Stock came off a little, but the market has come off, so is not sure he could attribute the stock being particularly hit on its own. Has been climbing quite nicely from its February low. Likes this name. Have a good partnership with Disney (DIS-N) to create Star Wars games. Have shifted from gaming console type of games into mobile and digital type of games. Also, streamlined a number of games they have to improve the experience for the users. Has a decent valuation and is a good growth company.