NEW YORK (TheStreet) -- King Digital Entertainment's (KING) IPO may not win honors as the most pathetic start of a stock, but it demonstrates once again why I will consider buying an IPO only with Goldman Sachs (GS) as a lead underwriter. King Digital's sour taste encouraged investors to lose interest in Glue Mobile (GLUU) and Zynga (ZNGA).
For buy-and-hold Zynga investors, especially those using dollar cost averaging to increase exposure, King's missteps are welcomed because they place Zynga on sale even though the company continues to execute. Zynga's recent decline should be viewed in only one light -- a chance to add at a lower price.
Zynga become especially attractive to me in January, and I posted a Real Money Pro trade idea to get long. The stock was trading under $4 at the time. My most recent Zynga trade idea was last week. It's doubtful that the shares will double overnight, but Zynga is now my strongest long idea for investors with a time horizon of 12+ months.
I'm not the only one to think Zynga has further to climb. SAC Capital led by Steven Cohen increased its ownership to 5.1% according a SEC filing last week. Also, Zynga is nothing like King Digital, and it's a serious mistake to confuse prospects of the two.
Both offer games that feed player's addiction on platforms that include Facebook (FB), Apple (AAPL) iOS, Google's (GOOG) Android, Amazon's (AMZN) Kindle and others. King's one-hit wonder makes the current earnings multiple palatable, but as investing veterans know, Wall Street is a forward pricing mechanism.