Activision Blizzard, Inc. (NASDAQ:ATVI)

CAPS Rating: 5 out of 5

Activision Blizzard is a leading publisher of videogames, notably World of Warcraft, Call of Duty, Guitar Hero, and Tony Hawk.

Recs

2
Player Avatar yonkmember (71.81) Submitted: 5/13/2012 5:03:30 PM : Outperform Start Price: $12.34 ATVI Score: +9.11

Exciting lineup of games to be released in FY2012. DIII will have nice initial sales and staying power, giving continued sales through expansions and the online auction house. People are still playing DII...Next COD release should continue the momentum. Looking through their latest filings, there seems to be reduced operating costs for the company. Although reduced earnings YOY is an issue, I think several challenges are presented to the high-end video game industry, which could dissipate if the recovery continues, such as high 18--24 unemployment rate. The company pays a lot to management, but has no debt, lots of FCF that they use to pay a dividend and share buy backs. ~3.5 billion in cash and short-term investments. When the cash is backed out the EV/earnings is 12 TTM. With management electing to pay out dividends, and increasing the dividends, they are exhibiting confidence about ATVI and its sustainability. ATVI is becoming one of my core value holdings.

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