Activation Blizzard is set to grow and increase profits too

The motley fool

The stock of video game titan Activision Blizzard has climbed 73% since Call of Duty: Mobile launched in October 2019. But in the four years to the end of 2020, Activision Blizzard’s revenue grew at a compound annual rate of just 5.2%. It might not sound like a growth stock right now, but the change is happening.

The company is benefiting from a transition to digital distribution (such as subscriptions and in-game sales): digital content does not require manufacturing, packaging or distribution, and therefore increases profit margins. New content releases will be another growth driver for Activision Blizzard, along with growing user engagement and increasing revenue per user.

Two of Activision Blizzard’s best franchises – Call of Duty: War Zone and World of warcraft – are among the most watched games on Amazon’s game streaming platform, Twitch; the average number of simultaneous monthly viewers nearly doubled year over year in the last quarter, to 2.9 million. Other properties of the company include candy Crush, Overwatch, Hearthstone and Diablo.

Activision Blizzard has had leading franchises in a growing industry for decades. It has an extensive pipeline of growth initiatives within its most popular franchises. Consider adding stocks to your portfolio for the long term. (The Motley Fool owns stock and recommended Activision Blizzard.)

Ask the fool

From CF to Chubbuck, Idaho: How to determine the real value of a share?

The madman replies: You’re right to note that a stock’s current price doesn’t necessarily equal its intrinsic (sometimes called fair) value. Overly enthusiastic investors may have driven the price up into overvalued territory, or it may languish at an undervalued level due to lack of investor interest or confidence. Finding and investing in quality, undervalued companies is a smart strategy.

Determining the fair value of a stock, however, is easier said than done, and qualified analysts will often arrive at different estimates. Some will use a complicated “discounted cash flow” analysis, estimating future free cash flows and assigning them present values ​​based on the chosen discount rates. (In other words, it will always be an educated guess.)

Most individual investors prefer simpler ways to estimate a stock’s valuation. The price-to-earnings ratio, which divides the current stock price by the past 12-month earnings per share, is one of many useful tools: the lower the P / E ratio, the more attractive the price. (Although it’s important to remember that P / E ratios vary by industry.)

However, do not rely on just one valuation or inventory valuation method. Dig deep into any business you are considering for your wallet.

From PJ to Tarentum, PA: What is the size of “large cap” companies. and what is the size of “small caps”?

The madman replies: There is no single definition, but here’s a common one: consider companies with a market capitalization of less than $ 300 million to be micro-caps; between $ 300 million and $ 2 billion, small caps; between $ 2 billion and $ 10 billion, mid caps; between $ 10 billion and $ 200 billion, large caps; and above $ 200 billion, mega-caps.

For some current examples, Wendy’s is a mid cap, Starbucks is a large cap, and Pfizer is a mega cap.

School of fools

There is a good chance that you are looking forward to your retirement and hope that it will be pleasant and not stressful. No matter how old you are, there are likely things you can do now to improve your future financial security.

For starters: have a plan and make sure you follow it. Try to figure out how much money you will need to retire and how you will accumulate it. (Investing in a low-cost, general-purpose index fund regularly over many years can help you build up a big nest egg.)

Don’t hesitate to consult a paid financial planner – the good ones know a lot more about retirement matters than you do, and they can save you or earn you a lot more than they cost. (You can find a paid advisor near you at NAPFA.org.)

Many people are bored or feel lonely in retirement. A part-time job or a social hobby can solve these problems. (A part-time job for a few years can also generate a welcome income.) Think about what jobs or activities you would like.

Take some time to learn about Social Security and think about when you want to start collecting your benefits. You can start from 62 years old and up to 70 years old; the size of your benefit checks will depend on when you start. (Remember, if starting earlier means smaller checks, you’ll also get more.) Learn more at SSA.gov.

Don’t neglect health care in your planning, as chances are it will cost you dearly. Fidelity Investments has estimated that the average couple retiring at age 65 this year will spend a total of $ 300,000 out of pocket on health care throughout their retirement.

The more you think about and plan for your retirement, the better it will be. You might want to consider purchasing an annuity, which can provide you with reliable income for the rest of your life. A reverse mortgage, while not right for many people, can help.

My dumbest investment

From NE, online: My dumbest investment was buying a vacation timeshare.

The madman replies: While there are certainly some happy timeshare owners, there are many, like you, who regret their purchases.

Buying a timeshare involves paying a lump sum, usually with an annual maintenance fee also required, in exchange for partial ownership (or just the right to use) a property or group of properties. (Sometimes this is for a specific unit in a property; often it is not.) Maintenance fees are charged whether or not you use your unit (s), and they tend to increase with the time. Your share gives you the right to use the property (s) for a certain period of time and frequency, often one week per year. Some timeshares allow you to rent or sell your share, while others do not.

The Federal Trade Commission website (FTC.gov) has a disclaimer page titled “Timeshares, Vacation Clubs and Related Scams.” He notes that timeshare sales pitches – the industry is known for its very arrogant sellers – may present them as investments, but they are not investments. Think of them as vacation plans only, and be aware that they often lose value over time.

It can be very difficult to get rid of a timeshare – there is even a niche industry of companies that specialize in extracting people, although some of these are also scams. Do extensive research before buying a timeshare.

Who am I?

My roots go back to Cincinnati in 1857, when I was started as a manufacturer of safes and safes for banks. My business boomed after the Great Chicago Fire of 1871, when my 878 safes and safes in destroyed buildings survived intact. I then developed manganese steel doors that could withstand dynamite explosions. Today, based in North Canton, Ohio, I “automate, digitize and transform the way people do their banking and shopping.” I serve the 100 largest financial companies in the world and the 25 largest retailers, offering ATMs, ATMs, software, services and more. Who am I?

Can’t remember the question from last week? Find it here.

Trivia response from last week: Whirlpool