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Best video game stocks to invest in

We take a look at the gaming stocks that offer the greatest potential for punchy returns over the coming months and years…
The post Best video game stocks to invest in appeared first on Value the Markets.

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With so many of us stuck at home during the Covid-19 pandemic, it’s no wonder the video game industry has boomed in recent times.

After all, if you can’t leave the house for real, at least you can pretend to go outside and smell the pixelated roses. Likewise, with online multiplayer games, there’s even the chance to hang out with friends in the fake outdoors.

It’s definitely more fun than yet another Zoom quiz night with the in-laws.

And so, with player engagement now at an all-time high, the value of the companies that develop and market the games they sell have also enjoyed impressive growth.

Background on the industry

In 2021, the video game market in the US alone is worth more than $65 billion.

Things have come a long way since Dr William Higinbotham designed the first ever video game back in 1958. Known as Tennis for Two, it ultimately became the model for retro arcade game Pong.

These days, we can do a lot better than two white lines on a screen.

Players can walk through the stunning scenery of Assassin’s Creed Valhalla or the hyper-real post-apocalyptic landscapes of The Last of Us Part 2.

As PCs, games consoles, and even mobile phones get more and more powerful it’s become possible to bring incredible worlds to life. That’s especially appealing when most of the real world is off limits.

So, from Activision to Zynga, here are just a few of the best performing stocks to invest in right now.

Nintendo

Nintendo (TYO: 7974) is, of course, a household name. The company is behind franchises like worldwide phenomenon Pokémon, as well as Super Mario and The Legend of Zelda.

Since the start of 2020, shares in this industry titan have climbed 27% and its ¥7.3 trillion ($66 billion) market cap can’t be argued with.

Alongside the games themselves, the company is also heavily involved in the console business. The firm created the Game Boy and all of its descendants, as well as the blockbuster Nintendo Wii console.

The latest addition to the family is the immensely popular Nintendo Switch, which transforms from a home console to a handheld device. The device retails at $299 in the US.

Since the 2017 launch, the firm has sold more than 89 million Nintendo Switch consoles – outselling Sony’s (TYO: 6758 | NYSE: SONY) Play Station 3 and Microsoft’s (NASDAQ: MSFT) Xbox 360.

In its most recent fiscal year, ended March 31, Nintendo’s net sales surged 34% to ¥1.76 trillion ($16 billion) from ¥1.31 trillion the year.

Meanwhile, operating profit of ¥640 billion ($5.8 billion) knocked out the previous record of ¥501 billion in fiscal 2019. This soundly trumped fiscal 2020’s ¥352 billion profit, too.

Given its strength and continuing popularity, this stock is certainly one to watch.

Activision Blizzard

With powerful franchises like Call of Duty and World of Warcraft, Action Blizzard (NASDAQ: ATVI) is among the biggest video game developers in the world.

The company, which has a $60.8 billion market cap, reported a 25% increase in 2020 net revenue to $8.1 billion from $6.5 billion in 2019.

The Call of Duty first-person shooter franchise had a record 2020, sustaining more than 100 million active players per month. The game, which has free-to play and premium options, saw a 40% jump in premium sales year-on-year.

Shares in the firm are up 33% since 2020 began, getting a definite boost from a boom in tech stocks during the pandemic – especially those involved in at-home entertainment like video games and video streaming.

However, Activision Blizzard’s reputation has taken a hit of late – as has its share price.

California’s department of fair employment brought a lawsuit against Activision Blizzard. This was over allegations it had violated state laws around equal pay and civil rights.

Since the suit was filed July 20, following a two-year investigation, shares have fallen 15%.

The company disputes the allegations, which include discrimination against female employees, unequal pay, and sexual harassment. It called the State’s allegations “distorted, and in many cases, false”.

While things are somewhat up in the air when it comes to the lawsuit, the accompanying share price drop might end up being an opportunity to invest at an affordable price point. Watch this space.

Electronic Arts

As the company behind the massively successful FIFA soccer-based video game franchise, there’s a lot to recommend about Electronic Arts (NASDAQ: EA).

With a market cap of $40.5 billion and shares up 33% since the start of 2020, this is a powerful company. And it has only gathered power since the pandemic began.

In its fiscal year ended March 31, the firm’s net revenue was 1.8% higher at $5.6 billion versus $5.5 billion in fiscal 2020.

Meanwhile, in August, EA said it had hit 31 million FIFA 21 players, up 6 million from the figure in its annual report – posted back in May.

Apex Legends, the company’s free-to-play battle royale game, had reached 13 million active users by August. The game is a serious challenger to Epic Games’ hugely popular Fortnite Battle Royale, which took the world by storm back in 2017.

For those not in the know, battle royale in this context means a game where players compete to eliminate opponents and become the last player, or team, left standing. These games have a so-called ‘safe zone’ area that shrinks over time and players must avoid being trapped outside it.

The term battle royale comes from a Japanese film released in 2000 under the same name and with a similar premise.

The firm in February agreed a $2.1 billion deal for Glu Mobile, instantly scaling up its mobile games business. This as the world of video games has experienced massive growth amid the increasing availability and capability of smartphones.

With successful franchises, and continuing adaptation to trends with the Glu Mobile buy, investors should definitely consider EA.

Zynga

Speaking of mobile games, Zynga (NASDAQ: ZNGA) is a serious contender in this gigantic market.

Like EA and Activision Blizzard, the company’s shares are up 33% since 2020 began.

Plus, revenue surged 70% in 2020 to $1.7 billion from $1.0 billion. This after the firm’s Words With Friends, a multiplayer word game similar to Scrabble, achieved an all-time best for quarterly revenue and bookings in Q4.

Zynga has a $9.0 billion market cap and, in addition to Words With Friends, has popular titles like Hair Challenge, High Heels! and Tangle Master 3D – all with over 100 million worldwide downloads.

Worldwide, there are 3.8 billion smartphone users according to Statista – 48% of the population – an ever-higher climb from 2.5 billion in 2016.

As the market keeps expanding, and company keeps adding to its large number of popular titles, the potential for future growth remains high. Investing in this firm is a chance to capitalise on the trend.

Take 2 Interactive

Last in the list is Take 2 Interactive (NASDAQ: TTWO), the developer behind the Red Dead and Grand Theft Auto franchises.

With shares up 28% since 2020 began, this company—like many of the others in this list—was able to benefit from the pandemic’s surge in game stock interest.

This is clearly an excellent performer in the space and its Grand Theft Auto V game is one of the most critically-acclaimed and commercially successful titles of all time, having sold more than 145 million units.

Of course, the firm’s $18.3 billion market cap is hard to ignore as well.

In fiscal 2021, Take 2 Interactive’s net revenue climbed 10% to $3.4 billion from $3.1 billion in fiscal 2020.

Most recently, the company reiterated its outlook for fiscal 2022 (ending March) despite opting to delay the release of expanded and enhanced versions of its Grand Theft Auto V and Grand Theft Auto Online games for Grand Theft Auto V and Grand Theft Auto Online.

These had been set to launch in November, but the company is holding off “to allow additional time to further polish the final products”and these releases are now planned for March 2022.

It’s the combination of persistent strong engagement trends for its existing games and new games set to release in the rest of its fiscal year that have allowed the firm to reiterate guidance despite this setback.

Resilience, as well as the ongoing success of Grand Theft Auto, should certainly attract investor attention.

The post Best video game stocks to invest in appeared first on Value the Markets.

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Survey Shows Declining Concerns Among Americans About COVID-19

Survey Shows Declining Concerns Among Americans About COVID-19

A new survey reveals that only 20% of Americans view covid-19 as "a major threat"…

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Survey Shows Declining Concerns Among Americans About COVID-19

A new survey reveals that only 20% of Americans view covid-19 as "a major threat" to the health of the US population - a sharp decline from a high of 67% in July 2020.

(SARMDY/Shutterstock)

What's more, the Pew Research Center survey conducted from Feb. 7 to Feb. 11 showed that just 10% of Americans are concerned that they will  catch the disease and require hospitalization.

"This data represents a low ebb of public concern about the virus that reached its height in the summer and fall of 2020, when as many as two-thirds of Americans viewed COVID-19 as a major threat to public health," reads the report, which was published March 7.

According to the survey, half of the participants understand the significance of researchers and healthcare providers in understanding and treating long COVID - however 27% of participants consider this issue less important, while 22% of Americans are unaware of long COVID.

What's more, while Democrats were far more worried than Republicans in the past, that gap has narrowed significantly.

"In the pandemic’s first year, Democrats were routinely about 40 points more likely than Republicans to view the coronavirus as a major threat to the health of the U.S. population. This gap has waned as overall levels of concern have fallen," reads the report.

More via the Epoch Times;

The survey found that three in ten Democrats under 50 have received an updated COVID-19 vaccine, compared with 66 percent of Democrats ages 65 and older.

Moreover, 66 percent of Democrats ages 65 and older have received the updated COVID-19 vaccine, while only 24 percent of Republicans ages 65 and older have done so.

“This 42-point partisan gap is much wider now than at other points since the start of the outbreak. For instance, in August 2021, 93 percent of older Democrats and 78 percent of older Republicans said they had received all the shots needed to be fully vaccinated (a 15-point gap),” it noted.

COVID-19 No Longer an Emergency

The U.S. Centers for Disease Control and Prevention (CDC) recently issued its updated recommendations for the virus, which no longer require people to stay home for five days after testing positive for COVID-19.

The updated guidance recommends that people who contracted a respiratory virus stay home, and they can resume normal activities when their symptoms improve overall and their fever subsides for 24 hours without medication.

“We still must use the commonsense solutions we know work to protect ourselves and others from serious illness from respiratory viruses, this includes vaccination, treatment, and staying home when we get sick,” CDC director Dr. Mandy Cohen said in a statement.

The CDC said that while the virus remains a threat, it is now less likely to cause severe illness because of widespread immunity and improved tools to prevent and treat the disease.

Importantly, states and countries that have already adjusted recommended isolation times have not seen increased hospitalizations or deaths related to COVID-19,” it stated.

The federal government suspended its free at-home COVID-19 test program on March 8, according to a website set up by the government, following a decrease in COVID-19-related hospitalizations.

According to the CDC, hospitalization rates for COVID-19 and influenza diseases remain “elevated” but are decreasing in some parts of the United States.

Tyler Durden Sun, 03/10/2024 - 22:45

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Government

Rand Paul Teases Senate GOP Leader Run – Musk Says “I Would Support”

Rand Paul Teases Senate GOP Leader Run – Musk Says "I Would Support"

Republican Kentucky Senator Rand Paul on Friday hinted that he may jump…

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Rand Paul Teases Senate GOP Leader Run - Musk Says "I Would Support"

Republican Kentucky Senator Rand Paul on Friday hinted that he may jump into the race to become the next Senate GOP leader, and Elon Musk was quick to support the idea. Republicans must find a successor for periodically malfunctioning Mitch McConnell, who recently announced he'll step down in November, though intending to keep his Senate seat until his term ends in January 2027, when he'd be within weeks of turning 86. 

So far, the announced field consists of two quintessential establishment types: John Cornyn of Texas and John Thune of South Dakota. While John Barrasso's name had been thrown around as one of "The Three Johns" considered top contenders, the Wyoming senator on Tuesday said he'll instead seek the number two slot as party whip. 

Paul used X to tease his potential bid for the position which -- if the GOP takes back the upper chamber in November -- could graduate from Minority Leader to Majority Leader. He started by telling his 5.1 million followers he'd had lots of people asking him about his interest in running...

...then followed up with a poll in which he predictably annihilated Cornyn and Thune, taking a 96% share as of Friday night, with the other two below 2% each. 

Elon Musk was quick to back the idea of Paul as GOP leader, while daring Cornyn and Thune to follow Paul's lead by throwing their names out for consideration by the Twitter-verse X-verse. 

Paul has been a stalwart opponent of security-state mass surveillance, foreign interventionism -- to include shoveling billions of dollars into the proxy war in Ukraine -- and out-of-control spending in general. He demonstrated the latter passion on the Senate floor this week as he ridiculed the latest kick-the-can spending package:   

In February, Paul used Senate rules to force his colleagues into a grueling Super Bowl weekend of votes, as he worked to derail a $95 billion foreign aid bill. "I think we should stay here as long as it takes,” said Paul. “If it takes a week or a month, I’ll force them to stay here to discuss why they think the border of Ukraine is more important than the US border.”

Don't expect a Majority Leader Paul to ditch the filibuster -- he's been a hardy user of the legislative delay tactic. In 2013, he spoke for 13 hours to fight the nomination of John Brennan as CIA director. In 2015, he orated for 10-and-a-half-hours to oppose extension of the Patriot Act

Rand Paul amid his 10 1/2 hour filibuster in 2015

Among the general public, Paul is probably best known as Capitol Hill's chief tormentor of Dr. Anthony Fauci, who was director of the National Institute of Allergy and Infectious Disease during the Covid-19 pandemic. Paul says the evidence indicates the virus emerged from China's Wuhan Institute of Virology. He's accused Fauci and other members of the US government public health apparatus of evading questions about their funding of the Chinese lab's "gain of function" research, which takes natural viruses and morphs them into something more dangerous. Paul has pointedly said that Fauci committed perjury in congressional hearings and that he belongs in jail "without question."   

Musk is neither the only nor the first noteworthy figure to back Paul for party leader. Just hours after McConnell announced his upcoming step-down from leadership, independent 2024 presidential candidate Robert F. Kennedy, Jr voiced his support: 

In a testament to the extent to which the establishment recoils at the libertarian-minded Paul, mainstream media outlets -- which have been quick to report on other developments in the majority leader race -- pretended not to notice that Paul had signaled his interest in the job. More than 24 hours after Paul's test-the-waters tweet-fest began, not a single major outlet had brought it to the attention of their audience. 

That may be his strongest endorsement yet. 

Tyler Durden Sun, 03/10/2024 - 20:25

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Government

The Great Replacement Loophole: Illegal Immigrants Score 5-Year Work Benefit While “Waiting” For Deporation, Asylum

The Great Replacement Loophole: Illegal Immigrants Score 5-Year Work Benefit While "Waiting" For Deporation, Asylum

Over the past several…

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The Great Replacement Loophole: Illegal Immigrants Score 5-Year Work Benefit While "Waiting" For Deporation, Asylum

Over the past several months we've pointed out that there has  been zero job creation for native-born workers since the summer of 2018...

... and that since Joe Biden was sworn into office, most of the post-pandemic job gains the administration continuously brags about have gone foreign-born (read immigrants, mostly illegal ones) workers.

And while the left might find this data almost as verboten as FBI crime statistics - as it directly supports the so-called "great replacement theory" we're not supposed to discuss - it also coincides with record numbers of illegal crossings into the United States under Biden.

In short, the Biden administration opened the floodgates, 10 million illegal immigrants poured into the country, and most of the post-pandemic "jobs recovery" went to foreign-born workers, of which illegal immigrants represent the largest chunk.

Asylum seekers from Venezuela await work permits on June 28, 2023 (via the Chicago Tribune)

'But Tyler, illegal immigrants can't possibly work in the United States whilst awaiting their asylum hearings,' one might hear from the peanut gallery. On the contrary: ever since Biden reversed a key aspect of Trump's labor policies, all illegal immigrants - even those awaiting deportation proceedings - have been given carte blanche to work while awaiting said proceedings for up to five years...

... something which even Elon Musk was shocked to learn.

Which leads us to another question: recall that the primary concern for the Biden admin for much of 2022 and 2023 was soaring prices, i.e., relentless inflation in general, and rising wages in particular, which in turn prompted even Goldman to admit two years ago that the diabolical wage-price spiral had been unleashed in the US (diabolical, because nothing absent a major economic shock, read recession or depression, can short-circuit it once it is in place).

Well, there is one other thing that can break the wage-price spiral loop: a flood of ultra-cheap illegal immigrant workers. But don't take our word for it: here is Fed Chair Jerome Powell himself during his February 60 Minutes interview:

PELLEY: Why was immigration important?

POWELL: Because, you know, immigrants come in, and they tend to work at a rate that is at or above that for non-immigrants. Immigrants who come to the country tend to be in the workforce at a slightly higher level than native Americans do. But that's largely because of the age difference. They tend to skew younger.

PELLEY: Why is immigration so important to the economy?

POWELL: Well, first of all, immigration policy is not the Fed's job. The immigration policy of the United States is really important and really much under discussion right now, and that's none of our business. We don't set immigration policy. We don't comment on it.

I will say, over time, though, the U.S. economy has benefited from immigration. And, frankly, just in the last, year a big part of the story of the labor market coming back into better balance is immigration returning to levels that were more typical of the pre-pandemic era.

PELLEY: The country needed the workers.

POWELL: It did. And so, that's what's been happening.

Translation: Immigrants work hard, and Americans are lazy. But much more importantly, since illegal immigrants will work for any pay, and since Biden's Department of Homeland Security, via its Citizenship and Immigration Services Agency, has made it so illegal immigrants can work in the US perfectly legally for up to 5 years (if not more), one can argue that the flood of illegals through the southern border has been the primary reason why inflation - or rather mostly wage inflation, that all too critical component of the wage-price spiral  - has moderated in in the past year, when the US labor market suddenly found itself flooded with millions of perfectly eligible workers, who just also happen to be illegal immigrants and thus have zero wage bargaining options.

None of this is to suggest that the relentless flood of immigrants into the US is not also driven by voting and census concerns - something Elon Musk has been pounding the table on in recent weeks, and has gone so far to call it "the biggest corruption of American democracy in the 21st century", but in retrospect, one can also argue that the only modest success the Biden admin has had in the past year - namely bringing inflation down from a torrid 9% annual rate to "only" 3% - has also been due to the millions of illegals he's imported into the country.

We would be remiss if we didn't also note that this so often carries catastrophic short-term consequences for the social fabric of the country (the Laken Riley fiasco being only the latest example), not to mention the far more dire long-term consequences for the future of the US - chief among them the trillions of dollars in debt the US will need to incur to pay for all those new illegal immigrants Democrat voters and low-paid workers. This is on top of the labor revolution that will kick in once AI leads to mass layoffs among high-paying, white-collar jobs, after which all those newly laid off native-born workers hoping to trade down to lower paying (if available) jobs will discover that hardened criminals from Honduras or Guatemala have already taken them, all thanks to Joe Biden.

Tyler Durden Sun, 03/10/2024 - 19:15

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