5 Best Low Risk Investments in 2023

3. Activision Blizzard, Inc. (NASDAQ:ATVI)

Number of Hedge Fund Holders: 134

Activision Blizzard, Inc. (NASDAQ:ATVI) is a low risk investment amid the company’s long-term growth catalysts as well as due to strong chances it’s buyout by Microsoft Corporation (NASDAQ:MSFT) will be given a green light soon.

As of the end of second quarter of 2023, 134 hedge funds tracked by Insider Monkey had stakes in Activision Blizzard, Inc. (NASDAQ:ATVI). David Einhorn’s Greenlight Capital opened an $18.7 million stake in Activision Blizzard, Inc. (NASDAQ:ATVI) during the second quarter.

Here is what Aristotle Value Equity has to say about Activision Blizzard, Inc. (NASDAQ:ATVI) in its Q2 2023 investor letter:

“Headquartered in Santa Monica, California, Activision Blizzard is one of the largest video game companies in the world. The company develops and sells games that are played by nearly 400 million monthly active users across 190 countries. Activision Blizzard is a product of the 2008 merger of Activision, the console game maker, and Blizzard Entertainment, the PC game maker. In 2015, Activision Blizzard also acquired King Digital Entertainment, the developer of mobile games. The combined entities own some of the most well‐known franchises globally, including World of Warcraft, Call of Duty and Candy Crush. Together these three franchises account for roughly 80% of Activision Blizzard’s sales.

The company has successfully navigated multiple console cycles and, in recent years, has shifted its revenue mix away from physical sales toward more recurring sources. In 2013, roughly 70% of sales came from physical games, while today ~75% of sales come from subscriptions, in‐game content and advertising across mobile devices, consoles and PCs.

In early 2022, Microsoft—a current Value Equity holding—announced its intention to acquire Activision Blizzard. Our subsequent discussions with Sony, also a current holding, furthered our understanding that access to Activision Blizzard’s gaming franchises is critical for PlayStation, Xbox and the broader videogame industry. We do not attempt to predict regulatory approval of the transaction and instead view the company as an optimal investment regardless of whether the acquisition takes place…” (Click here to see the full text)