If You Own Activision Blizzard (ATVI) Stock, Should You Sell It Now?

On July 8, 2020, Giverny Capital released its Q2 2020 Investor Letter, a copy of which you can download here. The Fund returned 19.64% for the second quarter of 2020. Meanwhile, the benchmark S&P 500 Index gained 20.54%. You should check out Giverny Capital’s top 5 stock picks for investors to buy right now, which could be the biggest winners of the stock market crash.

In the said letter, Giverny Capital highlighted a few stocks and Activision Blizzard Inc. (NASDAQ:ATVI) is one of them. Activision Blizzard Inc. (NASDAQ:ATVI) is a video game company based in California. Year-to-date, Activision Blizzard Inc. (NASDAQ:ATVI) stock gained 31.5% and on July 14th it had a closing price of $79.77. Here is what Giverny Capital said:

“Activision is a leading maker of complex, highly interactive video games, including World of Warcraft and Call of Duty. We’ve followed the company for years (and owned it personally) and believe it is well positioned to win increasing hours of consumer attention. But Activision has struggled to come up with hit games in recent years. It relies heavily on new iterations of Call of Duty, plus the mobile game Candy Crush. A highly interactive multi-player game can cost upwards of $100 million to create. We’re not sure work-from-home is conducive to this kind of large-scale engineering and animation work.

Activision clearly benefits from the pandemic as people stay at home, but this won’t last forever. As Activision caught a tailwind this spring, we opted to exit the business. At best, we were premature. The stock has risen about 20% since we sold it as the stay-at-home theme strengthens.”

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In Q1 2020, the number of bullish hedge fund positions on Activision Blizzard Inc. (NASDAQ:ATVI) stock increased by about 33% from the previous quarter (see the chart here), so a number of other hedge fund managers don’t seem to agree with Activision Blizzard’s downside potential. Our calculations showed that Activision Blizzard Inc. (NASDAQ:ATVI) is ranked #21 among the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 185% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 109 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

Video: Top 5 Stocks Among Hedge Funds

At Insider Monkey we scour multiple sources to uncover the next great investment idea. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Hedge fund sentiment towards Tesla reached its all time high at the end of 2019 and Tesla shares more than tripled this year. We are trying to identify other EV revolution winners, so we are checking out this tiny lithium stock. You can subscribe to our free enewsletter below to receive our stories in your inbox:

Disclosure: None. This article is originally published at Insider Monkey.