What are the best stocks to buy now for video games and esports? In this period of turmoil marked by erratic price fluctuations, economic recession, and spiraling unemployment, it seems like a daunting challenge to find stocks to invest your money into.
Any investors may think that the stock market is behaving irrationally and misled by the end of March’s dramatic rebound in stock prices. The motions of the market are not far from economic realities. The economic truth is that long-term real interest rates are negative, cheap credit is flooding the Federal Reserve system, and the current economic downturn is temporary.
Investors can wonder how to benefit from a company based on audiences playing video games played by others. However, since the Covid-19 coronavirus pandemic, the business has experienced a significant rise in patronage as customers sit at home. Since they make money from television licensing agreements, merchandise, live-event ticket purchases, sponsorships, ads, and other platforms, this has increased demand in video game stocks and esports firms.
Savvy investors have used hedge funds to calculate equity profitability and to grasp the direction of consumer sentiment as a litmus test. Insider Monkey analysis has shown that, since March 2017, a small number of hedge fund holdings have significantly outperformed the S&P 500 ETFs by more than 56 percentage points (see the details here). As such, the feelings of hedge funds are certainly a valuable predictor that should be paid heed to by seasoned investors.
We scour several outlets at Insider Monkey to discover the next brilliant idea for investment. We go through lists such as America’s 10 most profitable firms to pick the best large-cap stocks to acquire. While we suggest positions in just a small fraction of the firms we review, as many securities as we can are tested out. We read letters from hedge fund clients and listen to stock pitches at conferences for hedge funds.
Using hedge fund sentiment details from 800+ hedge funds, we ranked the top 5 stocks to buy for online games and esports. Here are the best stocks to invest according to hedge funds for online games and esports:
- Inc. in Zynga (NASDAQ: ZNGA)
In the United States and globally, Zynga Inc (NASDAQ:ZNGA) develops, markets, and runs interactive games as live services. On smartphone devices such as Apple iOS and Google Android operating systems, as well as on social networking sites such as Facebook (NASDAQ:FB) and Snapchat, the company’s games are played.
The firm has a $10,424bn market capitalization, while the share price of the company has risen this year by 57.8 percent. The number of bullish Zynga Inc (NASDAQ: ZNGA) hedge fund bets was 59 in Q1 2020.
As Zynga Inc. (NASDAQ:ZNGA) reaches the next earnings announcement, analysts are forecasting estimated earnings of $0.06 per share on August 5, 2020, which marks a +250 percent year-over-year shift. It is also estimated that sales will be $503.07 million, up 33.7 percent from the year-ago period.
Iridian Asset Management holds the most significant stake, worth $160.2 million, in Zynga Inc (NASDAQ: ZNGA) as of March 2020. This was followed by Revival Innovations, which raised shares worth $117.6 million. The stock was also very bullish for Cadian Capital, Two Sigma Advisors, and Citadel Investment Group, being one of the company’s biggest hedge fund investors. Greenvale Capital allocated the highest weight to Zynga Inc (NASDAQ: ZNGA), which constitutes 12.6 percent of its 13F portfolio, with respect to portfolio weights assigned to each position. Shelter Haven Wealth Management is still reasonably strongly optimistic on the company, allocating 6.69% of its 13F equity portfolio to the stock.
- Take-Two Applications Immersive, Inc (NASDAQ: TTWO)
Take-Two Interactive Applications, Inc. (NASDAQ: TTWO) produces, releases, and promotes worldwide interactive consumer entertainment solutions. The New York based corporation sells its products under the Rockstar Sports, Private Division, 2K brands, and Social Point labels, according to Yahoo Finance. Under the titles of Grand Theft Auto, Max Payne, Midnight Club, and Red Dead Salvation, the cloud business is credited with action/adventure items and sells episodes, content, and virtual currency.
The firm has a $18.351B market capitalization, while the stock’s YTD results stands at 30.7 percent. Take Two Digital announced results for fiscal 2020 for the first quarter on Aug 3. The corporation generated GAAP net sales of $831 million for the year, and GAAP income of $0.77 per share.
In total, Take Two Interactive (NASDAQ: TTWO) has 66 hedge funds in its portfolio.
- Inc. of Electronic Arts (NASDAQ:EA)
NASDAQ:EA) produces, markets, publishes and distributes worldwide software, software, and services for gaming consoles, PCs, smart phones, and tablets. Electronic Arts Inc.
The firm has a $40B market capitalization, while its share price has risen this year by 29.11 percent. Electronic Arts (NASDAQ:EA) posted earnings of $1.25 per share for the first-quarter fiscal 2021, which fell 73.7 percent year on year. Revenues, though, grew to $1.45 billion by 20.7 percent (year on year).
There are a total of 73 hedge fund investors in the business. The biggest shareholder in Electronic Arts Inc. (NASDAQ:EA) was AQR Capital Management, with an investment worth $301.1 million as of September last year. The company’s second biggest hedge fund partner is AQR Capital Management, which has amassed an investment worth $204.1 million. There are also large stock holdings in Renaissance Technology, SoMa Venture Partners, and SRS Wealth Banking. SoMa Equity Partners leads in this group in terms of the fund weights allocated to each position, having assigned Electronic Arts Inc. 9 percent of its 13F portfolio (NASDAQ:EA). KCL Capital is still reasonably strongly optimistic on the company, allocating 4.96% of its equity portfolio of 13F to the stock.
- Corporation NVIDIA (NASDAQ: NVDA)
As a gaming and crypto company, NVIDIA Corporation (NASDAQ: NVDA) operates. Earlier this week, we released a detailed NVIDIA write-up.
NVDA is in 95 hedge funds’ portfolios. The highest option stake in NVIDIA Company (NASDAQ:NVDA), which was worth $1.1 billion, was purchased by Citadel Investment Group. This was followed by GQG Partners, who amassed shares worth $995 million. Also positive on the stock are D E Shaw, Fisher Wealth Management, and Citadel Investment Group, with major positions allocated to the stock in their portfolios. With respect to portfolio weights, Albar Capital assigned NVIDIA Company (NASDAQ:NVDA) the highest weight so far, allocating 12.79 percent of its 13F portfolio. Still very optimistic on the stock is AlphaOne Capital Partners, allocating 9.6 percent of its 13F equity portfolio to the stock.
- Activision Blizzard, Inc. (NASDAQ:ATVI)
Activision Blizzard, Inc. (NASDAQ:ATVI) is our list of the best video games available. The business was founded back in 1979 byAtari’s underpaid workers.
The firm currently has a $66 billion market capitalization and its share price has risen by 45% so far this year. On Aug 4, Activision Blizzard (NASDAQ:ATVI) is expected to announce its 2020 Q2 earnings. The corporation expects $1.69 billion in non-GAAP sales and profits of 64 cents per share. The forecast figure shows a 79 percent surge from the announced figure for the year-ago quarter.
There are 101 hedge fund partners in the firm. With a stake worth $273.1 million, Citadel Investment Group was the biggest shareholder in Activision Blizzard, Inc. (NASDAQ:ATVI). Alkeon Capital Management, which owned $224.1 million worth of the company’s stock, was followed by Citadel Investment Group. Substantial portions of their portfolio were also allocated to the market by Jericho Capital Asset Management, SoMa Equity Partners, and Suvretta Capital Management, making them among the company’s biggest hedge fund investors. Jericho Capital Asset Management leads in this group with an allocation of 13.82 percent of its 13F portfolio to Activision Blizzard, Incc in terms of portfolio weights. (NASDAQ:ATVI) .In this group, Exploration Capital Management comes second after the Asany set aside 10.28 percent of its 13F equity portfolio to stock.
Source: Yahoo Finance