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Activision Blizzard Hits All-Time High: Time to Invest?

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Activision Blizzard, Inc.ATVI reached a new 52-week high of $30.00 on Aug 28, closing a tad lower at $29.22. The company has been having a bullish run since its addition to the S&P 500 index on Aug 27. Since then Activision has gained about 7.1%, indicating positive investors' sentiment.

On Friday, Activision replaced Pall Corporation PLL , a leading provider of advanced filters on the index, after the latter was acquired by Danaher Corp. DHR . The news is encouraging for the investors as the S&P 500 is the most popular of all the U.S. indexes and is often regarded as the best proxy for gauging the U.S. equities market.

Nonetheless, a price appreciation is expected for a stock just after its addition to an important index as large institutional investors adjust their positions in tandem. The new positions added generally have a positive effect on prices. As of Aug 28, this Zacks Rank #2 (Buy) company had a market cap of about $21.3 billion.

Activision was selected for the index after having fulfilled a number of criteria that includes nationality of the company, market capitalization and some other financial requirements.

The company has been benefiting from its unyielding focus on augmenting its franchise portfolio, innovation and initiatives to reach new markets. At the end of the recently reported second-quarter 2015 quarter, Activision had two out of five prime videogame franchises in North America and Europe. This apart, it also had as many as three of the top five next generation games. Encouraged by the top-line growth, the company also raised its guidance for 2015.

In addition, the company delivered a positive earnings surprise of 120% in its recently reported results. This apart, the company has been delivering strong results over the past few quarters. In the trailing four quarters, Activision has posted an average positive surprise of 151.53%.

We believe that the company still has plenty of steam left with the strength continuing in its games like Guitar Hero . Additionally, Activision has a strong pipeline including the upcoming release of Call of Duty: Black Ops 3 that is set to be launched this November.

Another stock worth considering in the gaming space is Electronic Arts Inc. EA . It has the same Zacks Rank as Activision.

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DANAHER CORP (DHR): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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