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ATVI

Recommendation

BUY ON WEAKNESS, November 20, 2014

Summary

Activision is showing tremendous execution bringing some big name game titles to the market, leading into the holiday season. Add to this positive trends around competitor game delays and next gen console sales and ATVI is a good buy on weakness in November.

Analysis

Recently there has been a lot of brouhaha over Destiny, the supposed "future" game franchise for Activision. 

The game that was launched to sky high expectations, met with lackluster reviews with spurts of news that people actually enjoyed playing it. Then there is this whole thing about Activision being coy with actual sales numbers.

+ Whatever the reality, the fact remains that Activision beat on it's quarterly expectations and raised guidance for the year recently, attributing much of this to Destiny.

+ Add to this the fact that Activision is launching some big name titles going into the holiday season:

1) Call of Duty: Advanced Warfare - early november
2) World of Warcraft: Warlords of Draenor expansion pack - mid november
3) Destiny: The Dark Below - early december

+ With it's primary competitors like EA's Battlefield and Take Two's Evolve postponed to next year, the holiday season should prove highly lucrative to Activision.

+ Finally as Microsoft and Sony fight each other to sell as many next gen PS4 and Xbox One consoles, this wave should also benefit Activision for the next 3 months.

Disclosure: I have had a long position in ATVI for a while and recently added to it last week.

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