Activision has been on a tear. In 3 months it’s up over 38% as it continues it steady march upwards. The question is, can it continue?
After looking at its fundamentals you might be convinced that it still has room to grow. It’s PEG ratio is sitting at a healthy .3646. That’s an impressive number which suggests that although it’s P/E is rising, the earnings growth is still outpacing it.
Also, the balance sheet is healthy with a debt/equity ratio of .5105 and although it’s recently decided to buy King Digital ($KING) for $6 billion, it can manage the purchase considering it has over $4 billion in cash alone.
It appears things are working out well for Activision. It was just added to the S&P 500 and its core gaming franchise, Call of Duty, has just released its latest edition to rave reviews. Indications are that the game has been selling very well. Just to confirm what’s been being said about Call of Duty sales on the internet, I made a trip down to the Best Buy to ask how the game was selling. The answer I got was they sold out. That’s real research.
Be sure to sign up for our newsletter. The FREE Peter Lynch screener is updated monthly.