Glu Mobile (GLUU) shareholders have had a roller coaster ride with the stock in 2012. The stock started the year around $3 a share and in a series of moves moved past $5.50 a share before plunging to under $3 a share recently on comments that some of its new games underperformed expectations in the third quarter. The stock now is on the move up again in the last few trading sessions on several positives for the company. Aggressive investors may want to take a position in this volatile gaming concern as the company seems to have several catalysts and good growth prospects.
Recent positives for Glu Mobile:
- Stifel Nicolaus initiated the shares today with a "Buy" rating and a $5 price target.
- GGV Capital, which has a director on the company's board, recently bought over 3mm new shares.
- The company reiterated its revenue guidance of $20.25mm to $21.25mm range in the third quarter despite the lack of new breakout hits. It also announced several new games to that should contribute to Q4 revenue as well.
- It recently made a deal to capitalize on the nascent mobile gambling space.
- The company also has optimize its top titles for the iPhone5.
Glu Mobile Inc designs, markets, and sells mobile games worldwide. It offers a portfolio of action/adventure and casual games to smartphones and tablet devices users.
4 additional reasons to pick up GLUU at just over $3.50 a share:
- The median price target on the stock is over $6 a share by the 10 analysts that cover the stock. GLUU is on track to turn profitable next year with the consensus earnings estimates of 17 cents a share.
- GLUU is experiencing rapid revenue growth. Sales are on track for a 30% increase in FY2012 and analysts currently expect 35% revenue gains in FY2013.
- The company has a solid balance sheet with over 10% of its market capitalization in net cash. It has also easily beat earnings estimates for the last four quarters.
- The stock has good technical support at the $3 price level (See Chart).
Disclosure: I am long GLUU.