Why Electronic Arts (EA) Stock is a Compelling Investment Case

Wedgewood Partners recently released its Q3 2020 Investor Letter, a copy of which you can download here. The Fund returned 10.77% for the third quarter of 2020. Meanwhile, the benchmark S&P 500 Index and the Russell 1000 Value Index gained 8.93% and 5.59%, respectively. You should check out Wedgewood Partners’ top 5 stock picks for investors to buy right now, which could be the biggest winners of this year.

In the said letter, Wedgewood Partners highlighted a few stocks and Electronic Arts Inc. (NASDAQ:EA) is one of them. Electronic Arts Inc. (NASDAQ:EA) is a video game company. Year-to-date, Electronic Arts Inc. (NASDAQ:EA) stock gained 22.7% and on October 16th it had a closing price of $131.92. Here is what Wedgewood Partners said:

“Electronic Arts reported an over +70% increase in bookings during the quarter as the Company’s video game titles like FIFA, Madden, and Apex Legends benefitted from increased engagement during the pandemic. While the market expects results to decelerate from these levels, we continue to believe the Company possesses plenty of growth drivers, including several new franchise titles, a once-in-a-decade new console cycle, and the launch of its game development platform as a service, currently dubbed “Project Atlas.”

In Q2 2020, the number of bullish hedge fund positions on Electronic Arts Inc. (NASDAQ:EA) stock decreased by about 8% from the previous quarter (see the chart here), so a number of other hedge fund managers don’t believe in Electronic Arts growth potential. Our calculations showed that Electronic Arts Inc. (NASDAQ:EA) isn’t ranked 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. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. 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.