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Activision Blizzard (ATVI) Marked As A Barbarian At The Gate

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Activision Blizzard (ATVI) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Activision Blizzard as such a stock due to the following factors:

  • ATVI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $211.4 million.
  • ATVI has traded 5.8 million shares today.
  • ATVI traded in a range 220.5% of the normal price range with a price range of $0.91.
  • ATVI traded above its daily resistance level (quality: 5 days, meaning that the stock is crossing a resistance level set by the last 5 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Barbarian at the Gate' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in ATVI with the Ticky from Trade-Ideas. See the FREE profile for ATVI NOW at Trade-Ideas

More details on ATVI:

Activision Blizzard, Inc. publishes online, personal computer (PC), console, handheld, and mobile interactive entertainment products worldwide. It operates in three segments: Activision, Blizzard, and Distribution. The stock currently has a dividend yield of 1.1%. ATVI has a PE ratio of 13.9. Currently there are 17 analysts that rate Activision Blizzard a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Activision Blizzard has been 7.0 million shares per day over the past 30 days. Activision Blizzard has a market cap of $11.5 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 0.88 and a short float of 3.1% with 1.07 days to cover. Shares are up 55.6% year to date as of the close of trading on Wednesday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Activision Blizzard as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and expanding profit margins. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:

  • Powered by its strong earnings growth of 75.00% and other important driving factors, this stock has surged by 53.23% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, ATVI should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Software industry. The net income increased by 75.1% when compared to the same quarter one year prior, rising from $185.00 million to $324.00 million.
  • ATVI has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 3.91, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for ACTIVISION BLIZZARD INC is currently very high, coming in at 79.35%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 30.82% is above that of the industry average.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

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