Electronic Arts Inc (EA)

(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.

This company is changing the way we are doing things. The industry is going from console gaming into more of the mobile gaming. Have done a very good job of transitioning to that revenue source. Have also done well by reducing the number of games that they issue yearly, and increasing the quality. Also, have a partnership with Disney (DIS-N) in creating Star Wars games. Trading just slightly below the 200 day moving average. It has been a long-term mover and has done very well. Buy this on Dips.

They produce entertainment software for PCs, tablets and home video game consoles. Have done very well because the industry is moving from the physical console gaming to more of the digital gaming space. Mobile gaming revenues should continue to climb as consumers continue to buy and spend more on smart phones and tablets. This has done very well by having fewer types of titles out, rather than “60 something” titles. They are really focused on quality control. Has a partnership with Disney to produce games that are based on Star Wars. Trading at 21X forward earnings with a 14%-15% growth rate.

The time to buy electronics is not the 4^th quarter. You should buy from March to May or all the way through to September. We have resistance from end of September. This stock has rolled over. There is not much that is appealing to this right now.

Had been following this for some time and bought it during the August correction. They have been able to do really very well with the games that they have. Trading at a bit of a premium at 24X earnings, and you are getting about a 12-15 times growth rate. But this is the premier name in this particular space. They are moving well into the mobile space as well. Earnings are just climbing, climbing, climbing.

This would mirror the consumer discretionary sort of, particularly the retail sector. Without having done a seasonal analysis on this, his guess would be that this would actually mirror something to do with retail coming into the 4^th quarter. Retail has a specific seasonality, which goes from Oct 28 to Nov 29, Black Friday. A good time to be getting into this would be October 28. A caution is that the retail sector has a strong trend of pulling off just after Black Friday.

Just bought this week. It came down to the 100 day moving average. They are blowing away earnings estimates every single quarter. You are paying a little bit of a premium, but this is certainly a premium name.

This company sells something that is not that expensive and that people get hours and hours of use out of, so there is a very good value proposition. They have the strongest franchise in video games by far. Have all of the big Madden football, FIFA soccer, etc. These are games that people renew almost every year. Right now the market is in the midst of a console transition to PlayStation 4 and Xbox 1. Historically the 3^rd year of that transition is the strongest year and we are headed into that year. The market is moving to an online sales model, so people are buying these games and upgrades digitally as opposed to going into a store. This means the company gets a much better profit margin. They’ll generate close to $1 billion in cash in 2016. They are going to release the new Star Wars game. Initially said they were going to sell 1 million copies, but have now updated that to about 11.5 million copies.

The trend is great, scores in the top 10% on momentum and the valuation is still pretty good at 36% ROE. Has a solid balance sheet with no net debt, they actually have cash. In their most recent quarter, they beat earnings. This still has room to run.

This has done extremely well. A very strong earnings and beat in the last several quarters. Has outperformed its nearest competitors. There is a sector shift from traditional gaming console games into the more digital space. The one concern is that they just lost the person in charge of that, to Nintendo. They have a partnership with Disney (DIS-N) to create games surrounding the upcoming Star Wars video. Looks like an interesting name.