Top 5 Stocks Kettle Hill Capital Management Is Buying

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

Coming in the runner-up position in Activision Blizzard, Inc. (NASDAQ:ATVI), which was Kettle Hill’s second-largest new buy of Q3 2021.289,969 shares of the video game developer were added to Kettle Hill’s portfolio, giving it a position worth $23.22 million. That gives Kettle Hill two video game developers among its top five stock picks, as Take-Two Interactive Software, Inc. (NASDAQ:TTWO) has been a favorite of the fund for over two years.

In its Q1 2021 investor letter, Cooper Investors noted that if Activision Blizzard, Inc. (NASDAQ:ATVI) can successfully replicate its Call of Duty model with its other popular franchises like Warcraft and Diablo, Activision Blizzard, Inc. (NASDAQ:ATVI) should be able to significantly increase its free cash flow and transition more into a recurring services provider than a publisher. Mobile and free-to-play versions of Call of Duty were released in 2020 which resulted in the franchise’s operating income more than doubling.