Many investors seek stocks that they can buy and hold for long periods of times. Long term investments that investors are confident in are a lot less stressful than trying to time the market and constantly be making trades. To find the perfect stock you need more than just one reason to believe in the company. I am not going to sit here and throw numbers at you like any other person can. Anyone can read the numbers and read charts, I read into future growth and possible upside.
I believe I have found that company and it is not some small cap sleeper stock that no one knows about, in fact it is one of the most traded stocks on the Nasdaq. Zynga, ticker symbol ZNGA, is the perfect stock and I have plenty of reasons to back that up.
The main reason why I am extremely bullish on Zynga is the tremendous opportunity they have starring them right in the face. That opportunity is online poker. I am a poker player so I understand the amount of revenue that online poker is possible of generating. With the user base that Zynga poker already has, 30+ million, not to mention all the users that will jump on once online gambling is legalized, we could be talking billions of dollars in revenue per year. This isn't just some fairy tale opportunity either, it is only a matter of time before online gambling is legalized the government needs the tax money that would be generated plain and simple. The states of New Jersey and Delaware have already made the move and I expect California (where Zynga is based) to follow suit very shortly. This would surely prove to investors that Zynga can diversify from Facebook in a big way and send the stock sky rocketing. It is simple, how many times can you invest into a company that is about to do something that no company has ever legally done before? You have that opportunity starring you dead in the face right now!
The next reason I believe in Zynga is the simple fact that the stock is extremely undervauled and unfairly beaten down. One of my favorite investing strategies is finding undervauled companies that are undervauled for no valid reason and that is exactly what has happened to Zynga since it hit $15 a share. What has really happened to Zynga that is so bad that the stock deserves to be worth half the IPO value and one-third of its 52-week high value? I have not found a reason for that drop. Even without online gambling being legalized, Zynga will still rise from the levels it is currently at, simply because it is just undervalued.
After all Zynga is the leader in a growing field. All the doubt out there on Zynga will make you feel as if social gaming is a dying field. Social gaming is actually on pace to put traditional gaming like Xbox and Playstation out of business. People want something quick, easy, and free to occupy their time and the last time I checked Zynga has mastered that art.
All the signs point in the green arrow direction for Zynga. The upside here is tremendous! Not only can Zynga easily bounce back to its 52-week high very easily just by coming back to fair value, (150% gain) WHEN online gambling gets legalized, which is only a matter of time, their is no ceiling for Zynga. With Zynga sitting near all time lows this gives investors a perfect entry point to maximize profits.
Disclosure: I am long ZNGA.
Additional disclosure: Although I am extremely confident in this stock nothing is a guarantee in the market. Trade at your own risk.