We all have our watch lists. I'm no different. Here are four companies that I monitor almost every single day, and a brief opinion on each of them.
Activision Blizzard (ATVI): I sold this one back in January. Some believe I was wrong to do so. I definitely comprehend the sentiment, because really, this is the best publisher in the sector. Compared to Electronic Arts (ERTS) and Take-Two Interactive (TTWO), Activision Blizzard has an enviable pipeline. Unfortunately, the video-game industry isn't firing on all cylinders; check out the most recent monthly-sales report, and you'll see what I mean. In addition, the company's Guitar Hero franchise isn't the fad it once was. I do want to get in on the stock again, though; lately, the price seems to be perking up. I'm not ready to send in the buy order just yet. I'm waiting for further strength to materialize in the shares.
Lions Gate Entertainment (LGF): Sure, it's volatile. You don't know exactly what to make of the business model. The studio has valuable cinematic brands in its stable (e.g., Saw, the Tyler Perry films), but it operates in the extremely risky industry of Hollywood content. I'm not always a fan of the cash flow, but things turned out okay in February. This isn't a major conglomerate like Disney (DIS) or Time Warner (TWX). There are many strikes against the Lions Gate thesis. Still, you just want to own this one, don't you? I do, anyway. After all, you can never predict when another entity may decide that it's worthy of a buyout at a cool premium (nothing's guaranteed on that count, I should warn). The stock closed on Friday at $5.77. Too high for me; I'd wait until this one drops before taking another look.
Nintendo (NTDOY): Back to video games. Nintendo has a lot going for it: the Wii, the DS, the Mario titles, etc. And you've certainly noticed that the ADRs are getting closer and closer to the 52-week high of $39.50 (they closed yesterday at $38.15). I have to say the same thing about Nintendo that I said about Activision Blizzard: video games are a mess right now. Plus, the Wii was defeated by Microsoft's (MSFT) console last month. Nintendo's not done yet, though; new versions of Pokemon for the DS are due to arrive this weekend, and the company's hardware will continue to be popular through the rest of the current gaming cycle. I just wish the shares would go back below $30. Like I said in a previous article, Nintendo at less than $30 sometimes appears to signal a trading opportunity.
World Wrestling Entertainment (WWE): When WWE went public back in 1999, I never could have imagined that it would become notable as an income play. But that's exactly what it is. At a yield greater than 8%, it is surely attractive to dividend fans. You've got to be careful, however; like Lions Gate, you must keep an eye on the statement of cash flows. Fortunately, also like Lions Gate, cash flow has been all right as of late, as I discovered when I examined the fourth-quarter release. A couple days ago, shares of WWE hit a fresh 52-week high of $18.11. It pulled back from that level by the end of the week, closing at $17.27. I don't know what you may think of the chart, but I'm guessing WWE is heading higher; there are some fundamental concerns that need to be addressed with the business model, such as pay-per-view buy rates and revenue growth, so remember to include them in your evaluation. With the significant dividend yield attached, this investment idea is worthy of analysis.
Disclosure: I own Disney; positions can change without notice.
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Reader Comments (Page 1 of 1)
3-13-2010 @ 5:48PM
Dan Barnett said...
I'd question WWE when the CEO is getting involved in Connecticut politics. Whether ultimately successful or not, the campaign will take far too much of her time to allow her to pay sufficient attention to the company.