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Activision Blizzard, Inc. (ATVI) Receives Thumbs Up From UBS

Activision Blizzard, Inc. (NASDAQ:ATVI) is on watch this morning after Eric Sheridan of UBS hiked his price target on the video game maker to $57 per share from the previous $48 per share. The analyst did so due to more bullish expectations for Activision Blizzard, Inc. (NASDAQ:ATVI) past 2017, the potential for higher margins as digital revenue mix grows, and Activision Blizzard, Inc. (NASDAQ:ATVI)’s slow trend toward engagement and relatively steady monetization from the previous blockbuster hits type business model. Sheridan has a ‘Buy’ rating on the stock.

EPS could grow faster than expected if Activision also takes advantage of the upcoming trend toward augmented reality/virtual reality that would make the company’s massively multiplayer online role-playing games even more addictive and profitable.

What Does The Smart Money Sentiment Say?

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 39.7% gains over the past 12 months and outperformed the 24.1% gain enjoyed by the S&P 500 ETFs. Our enhanced small-cap hedge fund strategy returned more than 45% over the last 12 months and outperformed SPY by more than 30 percentage points over the last 4.5 years (see details here).

Of the 742 elite funds we track, 61 funds owned $2.78 billion of Activision Blizzard, Inc. (NASDAQ:ATVI) and accounted for 10.40% of the float on December 31, versus 64 funds and $4.24 billion respectively on September 30. In terms of notable individual fund activity, Stephen Mandel’s Lone Pine Capital raised its stake by 20% to 20.64 million shares in the fourth quarter. That position accounted for almost 3.9% of Lone Pine’s 13F portfolio at the end of 2016. Philippe Laffont‘s Coatue Management also inched up its holdings by 2% to 11.73 million shares, good for 5% of the fund’s 13F portfolio on December 31.

The Bottom Line

Activision Blizzard, Inc. (NASDAQ:ATVI) is on watch this morning after UBS hiked its price target on the stock. Although shares of the game maker have already surged 38% year-to-date, the investment bank sees more upside ahead.

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