Electronic Arts reduces red ink in Q1; should I be bullish on the stock?

As for me, I have to say that EA continues to be a publisher that I just can't elevate to serious potential-investment-idea status. Actually, that might be a little harsh, come to think of it. EA is a major publisher with some major brands. I suppose there is some potential hidden away in this idea.

But the thing is this: Why should I add EA to my portfolio when I already own Activision Blizzard? And for those who don't have any exposure to video-game software entities, why would they choose something other than Activision Blizzard? That company's business is hot right now, and when you talk about best-of-breed franchises, well, it's difficult to top intellectual properties such as Guitar Hero, World of Warcraft, and Call of Duty.

It's true: EA's stock has been on the rise since March, it's far from the 52-week low, and it could very well go higher. When I look at the red ink and the cash-flow statement, however, I find I'm just not intrigued enough to enter this trade. Activision Blizzard has been too good of an investment for me. I couldn't fathom giving up my nicely profitable position in that publisher at this point in the console cycle and reinvesting in EA. That is not the trade for me. My gut is telling me that Activision Blizzard is the one to hold into Christmas. Anything can happen between now and the start of the holiday selling season, so my opinion could change. At this time, I'll simply wish EA the best of luck and follow its progress from the sidelines.

Disclosure: I own Activision Blizzard; positions can change without notice.