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.

Electronic Arts Inc. (EA): Why Digital Matters So Much to This Industry

Bottom line

EA still trades at a sub-1 PEG ratio, but Activation’s is now much lower after EA’s recent run up.

Even with Electronic Arts Inc. (NASDAQ:EA)’ run up over the past year, its PEG is still below one? Yes, but if you look at Activision, which is up only 30% over the last 12 months, its PEG ratio is a mere 0.5.  Like I said back in May,

Activision, meanwhile, appears to be rather cheap for its value and has a large chunk of cash that it plans to put to work for investors. I would go for Activision, which still has a lot of room to grow in the digital space as well.

This is still the case for the company, which has a cash-to-price ratio of 27%. I still think Take-Two has some room to go before its turnaround is in full swing. So for now, I’d look to take some Electronic Arts’ shares off the table, and potentially redeploy that capital to Activision.

Marshall Hargrave has no position in any stocks mentioned. The Motley Fool recommends Activision Blizzard and Take-Two Interactive . The Motley Fool owns shares of Activision Blizzard.

The article Why Digital Matters So Much to This Industry originally appeared on and is written by Marshall Hargrave.

Marshall is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.