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If you missed out on the GameStop (GME) craze that happened earlier this year, don’t worry. The gaming market is jam-packed with stocks from companies with solid fundamentals. The gaming industry in general is also surging, more so now that eSports is a mainstream sport and the iGaming industry is legal in multiple countries worldwide.
According to research firm Deloitte, 33% of online gamers believe video games are helping them cope amid coronavirus. Add the fact that gaming was one of a few ways to seek entertainment last year, and it’s clear why the industry’s stocks have been on a spike.
All the same, you’re probably in it for the long-term. And in that case, watch out the following stocks. Don’t mind the occasional pullbacks and choppy movements. Check them out with the goal of staying around for several years or decades.
#1: Activision Blizzard (ATVI)
The ATVI stock has been in every seasoned stock buyer’s radar. Indeed, Activision was one of the best performing video game companies in 2020. The brands popular video games: Call of Duty, War Zone, Tony Hawk’s Pro Skater, and Crash Bandicoot were trending throughout the year.
COVID-19, despite its wreck around the world, is responsible for boosting ATVI in the stocks market. With most people quarantining at home, they had not excuse of not playing their favorite video game franchises.
In light of the great demand for video games in 2020, Activision generated a 12.7% sales increase through its physical products. Online, the company recorded a 24.5% year on year growth worth $2.34 billion.
Against that backdrop, the ATVI stock spiked by 50% between March last year and March this year. It has since experienced an 11% pullback. But that was expected. With the continued success of Call of Duty and the upcoming remake of Diablo 2, the ATVI stock will rise up again.
#2: 888 Holdings (EIHDF)
If you like to buy stocks from companies that payout decent dividends yearly, 888 Holdings is a great choice. 888 Holdings regularly pays out in the upwards of 30% of its annual profits as dividends. Last year, the figure stood at 34%.
But that’s not even the best part. Stocks for the British gambling brand soared to an all-time high of 227% between March last year and March this year. Like Activision Blizzard, 888 Holdings benefited tremendously from last year’s lockdown.
Most sources of entertainment were unavailable. As an alternative, people flocked sites like 888 Casino and Dreamz Casino to play slots, poker and blackjack. 888 Holdings has the benefit of owning multiple websites, from 888 Poker to 888 Sports.
All the same, 888 Holding’s massive growth rate last year is worth paying attention to for all investors out there. Of all the brand’s websites, 888.com was the biggest winner. It recorded a 49% bump in sales while the casino section grew by 27%.
#3: Turtle Beach (HEAR)
Some of the best stocks in the gaming industry come from companies that don’t really create video games. Turtle Beach is an example. This American company doubled its revenue last year, grossing $112.5 million for a 141% gain.
Turtle Beach creates gaming machines and accessories like keyboards, headsets, and mice. Its headsets are particularly popular among gamers. And with the Xbox Series X and PS5 out, the brand will mostly likely continue to soar.
Indeed, the company’s stock has more than tripled since March last year. At the time, it was trading for $11. Fast forward to March this year and the stock was selling for $33. Like ATVI, though the stock retraced by 10% in the final months of March before regaining momentum in April.
Microsoft is the perfect example of a safe stock. It’s large. It’s low-risk and it has brought results to investors for more than two decades. Microsoft became a gaming stock in the early 2000s with the introduction of the Xbox console. Then it double down on this industry with the purchase of game developers like Bethesda.
Of course, Microsoft isn’t an exclusively gaming company. That means for you to see profits from this stock, the company has to make moves across board. Fortunately, it’s doing exactly that.
For example, the California-based brand bagged a deal to supply 120,000 AR headsets to the US in March. The deal could be worth $21.88 billion in the next decade according to experts. In April, Microsoft purchased Nuance Communications, a health-care company at a valuation of $19.7 billion.
In the grand scheme of things, Microsoft has the assets needed to keep its stock rising. Last year, the stock grew by 39%. Sales, on the other hand, rose by 19%. Which is not as sharp a rise at 888 Holdings, it’s a worthwhile investment, nonetheless.
#5: Electronic Arts Inc. (EA)
EA is one of the biggest gaming brands in the world. It’s the brand behind award-winning video games like FIFA, Battlefield, Apex Legends, Madden and The Sims. Impressively, many of these games have a footprint in the eSports sector.
They are popular games online and partially responsible for EA’S $1.93 billion profit last year. EA has roughly 300 million account owners who play its many games. And the company believes it can increase this fan base to 500 million by the end of this year.
Increasing online account owners will be crucial for the EA stock’s success. That’s because there’s a fundamental revolution happening in the gaming world. The community is steadily shifting from buying physical game products—15% of what EA sells. And it’s shifting online.
The EA stock grew by 40% in the last one year despite these changes. That means if the company invests in online-based products, both its revenues and stocks value will grow.
In Summary
There are lots of good stocks to buy in the gaming industry. They come from a diverse list of companies. Some are video game developers, like EA and Activision Blizzard. Others, like 888 Holdings target gamblers. Still, some gaming companies focus on accessories and hardware. All the same, watch out for these brands because they’ve all been projected to soar in the future.
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