This Just In: Upgrades and Downgrades: Glu Mobile Inc. (GLUU), Zynga Inc (ZNGA) and More

Electronic Arts Inc. (NASDAQ:EA) and Activision Blizzard, Inc. (NASDAQ:ATVI)
No article on video gaming would be complete without at least mentioning the two giants of the world. Neither EA nor Activision gets much respect these days, in this world where all the talk is of mobile, social, and usually unprofitable game making. But for traditional investors, there’s still a lot to like in these companies.

Each is incredibly cash-profitable, generating far more free cash flow (cash profits) than it reports as net income. Of the two, Activision still earns my vote as the top value in big gaming, based on its low P/E (at 14.9, only half the price of a share of EA), its even lower price-to-free cash flow ratio (just 11.2), its steady-eddy growth rate of 9%, and its modest 1.6% dividend yield.

Throw in an “Easter Egg” in the form of a balance sheet brimming with $3.4 billion cash, and not a drop of debt, and I still think Activision is your best bet in gaming stocks todaya… although to be totally honest, after running all these numbers, I’m going to have to go back and take a much closer look at GameLoft as well.

The article This Just In: Upgrades and Downgrades originally appeared on Fool.com and is written by Rich Smith.

Fool contributor Rich Smith owns shares of Activision Blizzard (NASDAQ:ATVI). You can find him on CAPS, publicly pontificating under the handle TMFDitty, where he’s currently ranked No. 334 out of more than 180,000 members.The Motley Fool recommends Activision Blizzard. The Motley Fool owns shares of Activision Blizzard.

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