Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Hedge Funds Were Fans of Gaming Stocks Last Quarter

Page 1 of 2

Gaming companies are similar to movie studios. Both industries depend heavily on core franchises to deliver the type of returns that investors expect. Both sectors also entertain hundreds of millions of people around the world. What separates gaming companies from movie studios, however, is that producing a computer/mobile game generally costs less than making a tent-pole movie and major games can yield higher margins. Games can also go viral on little to no marketing spend, something that is rare in Hollywood.

Given those facts, let’s take a closer look at the smart money’s favorite gaming stocks as of the end of the second quarter, which were Activision Blizzard, Inc. (NASDAQ:ATVI), Electronic Arts Inc. (NASDAQ:EA), Take-Two Interactive Software, Inc. (NASDAQ:TTWO), Zynga Inc (NASDAQ:ZNGA), and Glu Mobile Inc. (NASDAQ:GLUU).

At Insider Monkey, we track around 750 hedge funds and institutional investors. Through extensive backtests, we have determined that imitating some of the stocks that these investors are collectively bullish on, can help retail investors generate double digits of alpha per year. The key is to focus on the small-cap picks of these funds, which are usually less followed by the broader market and allow for larger price inefficiencies (see the details here).

Adam Ziaja /

Adam Ziaja /

#5 Glu Mobile Inc. (NASDAQ:GLUU)

– Number of Hedge Fund Shareholders (as of June 30): 9
– Total Value of Hedge Funds’ Holdings (as of June 30): $17.5 million
– Hedge Funds’ Holdings as Percent of Float (as of June 30): 6.00%

With the hype over its Kim Kardashian game having largely faded, Glu Mobile Inc. (NASDAQ:GLUU) has had to develop other franchises and genres to fill the void. So far, the company hasn’t succeeded, as its shares are down by 6.17% year-to-date and off by over 50% in the last 12 months. Nevertheless, nine funds in our system, including Jim Simons‘ Renaissance Technologies, are among the believers. Mr. Simons’ fund raised almost doubled its stake in the company during the second quarter, to 424,000 shares. With cash and cash equivalents of $158 million and no debt as of the end of June, Glu Mobile has plenty of time to develop a hit game that wins over investors’ hearts.

Follow Glu Mobile Inc (NASDAQ:GLUU)
Trade (NASDAQ:GLUU) Now!

#4 Zynga Inc (NASDAQ:ZNGA)

– Number of Hedge Fund Shareholders (as of June 30): 20
– Total Value of Hedge Funds’ Holdings (as of June 30): $398.32 million
– Hedge Funds’ Holdings as Percent of Float (as of June 30): 18.30%

Like Glu Mobile, Zynga Inc (NASDAQ:ZNGA)’s best days are firmly behind it. The maker of FarmVille hasn’t succeeded as much in mobile as it has on social media platforms. Despite that fact, Zynga hasn’t stopped trying. In late-June, the company introduced CSR Racing 2, and it plans to develop more mobile-focused games in the future. With virtual reality and augmented reality games in their infancy, Zynga has another chance to recapture some of its magic by being an innovator through those platforms. 20 funds that we track, up by three funds quarter-over-quarter, were betting on Zynga as of the end of June.

Follow Zynga Inc (NASDAQ:ZNGA)
Trade (NASDAQ:ZNGA) Now!

The three most popular gaming stocks among hedge funds are run through on the next page.

Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!