Two Reasons to Avoid Zynga Inc (ZNGA), Two Companies to Buy

Another software game maker to consider is Take-Two Interactive Software, Inc. (NASDAQ:TTWO).  In June, Apple said that game controllers would be allowed to interact with Apple devices. Take-Two Interactive Software, Inc. (NASDAQ:TTWO) would benefit if demand for mobile games increase. In particular, strategy games like Ace Patrol would see an increase in sales. The Grand Theft Auto III title, remade for mobile, would also benefit from a game controller for Apple.

In May, Take-Two Interactive Software, Inc. (NASDAQ:TTWO) sold $250 million in convertible senior notes, which are due in 2018. The financing will be used partly to refinance another debt due next year. The company is set to report quarterly earnings on July 30, 2013 after the market closes.

Foolish Bottom Line

Investors are too optimistic that Zynga Inc (NASDAQ:ZNGA)’s downtrend is reversing. The company reduced headcount, only to use the funds for executive compensation. There are other opportunities to look at. The demand for mobile devices is not slowing down enough for mobile game makers to worry. Investors could start a position in companies like Take-Two and Gluu Mobile instead–both companies give exposure to investors for mobile games.

The article 2 Reasons to Avoid Zynga, 2 Companies to Buy originally appeared on Fool.com and is written by Chris Lau.

Chris Lau has no position in any stocks mentioned. The Motley Fool recommends Take-Two Interactive. Chris is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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