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  • GLUU: To Buy Or To Sell

    (NASDAQ:GLUU) Description: Glu Mobile Inc., markets and sells mobile games. The Company has developed and published a portfolio of action/adventure and casual games designed to appeal to a cross section of the users of smartphones and tablet devices who purchase its games through direct-to-consumer digital storefronts, as well as users of feature phones served by wireless carriers and other distributors. It creates games based on its own original brands, as well as third-party licensed brands. Its original games include Big Time Gangsta, Blood & Glory, Bug Village, Contract Killer, Contract Killer: Zombies, Eternity Warriors, Frontline Commando, Gun Bros, Men vs. Machines, Stardom: The A-List, Super K.O. Boxing and Toyshop Adventures. On August 2, 2011, the Company completed the acquisition of Griptonite, Inc. Effective May 16, 2014, Glu Mobile Inc acquired PlayFirst Inc.

    I have read into much speculation on Seeking Alpha stock talk, many people seem befuddled about where the stock stands. Some say buy and some say short it. I will give my analysis of the stock and whether I think it is a buy or a sell.

    1) Glu Mobile's Volatility: June 24, 2014 GLUU was trading at $3.78 per share and now less than 2 months later the stock is trading at $5.34. This seems like a nice upward trend; although July 22, GLUU reached its high of 7.55 and after earnings on July 30th had taken a large hit to the stock price to around 5.11 and has taken a slight rebound since. In 2 months the stock skyrocketed and had a large drop, so what's next for GLUU? This volatility may keep many investors away from a stock like GLUU because they may seek risk which is understandable but unreasonable because if there was no sell off after earnings there would have been no extreme drop in the share price.

    GLUU data by YCharts

    2) Competition: Knowing a companies competition is an important factor regarding taking a long position in a specific stock. Who are Glu Mobile's main competitors? (NYSE:KING) King digital and (NASDAQ:ZNGA) Zynga are without doubt the two most prolific competitors GLUU would have to worry about if at all. Investors don't need to worry about King Digital or Zynga being a threat to Glu Mobile's long term success.

    KING data by YCharts

    King Digital went public on March 26th, 2014 at an IPO price of $22.50, it immediately took a downturn. It has barely made it over the initial IPO price since it went public and currently is trading under it. King Digital has not fared out well so far mainly because they are a one hit wonder company. Their extremely popular game on the app store "Candy Crush Saga" accounted for 67% of total 1st quarter 2014 gross bookings. Once people had enough of this game and move on to something else, a new popular hit (perhaps even the new Glu Mobile game, Kim Kardashian:Hollywood). Unless King Digital begins to mass produce popular games I wouldn't seem them as a threat to Glu Mobile's success. As for Zynga, they are also no severe threat. March 2nd, 2012 Zynga was trading above 14.5 and now its hovering over its 52 week lows of 2.76. Today Zynga is trading down roughly 6% because of their quarterly report. Although they have popular games on the app store such as, Farmville, Farmville 2, Ninja Kingdom, City Ville, and Castle Ville, it seems that Zynga may be in trouble. Zynga's stock, down 18% over the past three months, fell 7% to $2.71 in after-hours trading. The San Francisco-based videogame maker on Thursday reported a wider second-quarter loss on revenue that slid by a third and lowered its full-year outlook on game-development delays.The company said it pushed back the launch of several titles and planned new features to later in 2014 and in 2015 because the games didn't meet its quality standards. Those delays hurt results in the last quarter and will affect results through the remainder of the year. Overall these companies don't pose a threat to Glu Mobile leaving them room to make a run to the top.

    3) Why should investors feel safe investing their money into Glu Mobile? As an investor I know myself that I like to have a plethora of reasons of why I think its safe and not a huge risk as well as room for my money to grow. Can Glu Mobile deliver this? After Glu Mobile's earnings were announce at the end of July there was a selloff and the stock dropped from the low 7's to the low 5's. GLUU has seen to rebound a little since that dropoff and I think its a good time to buy. Glu Mobile is the producer of many popular games on the app store such as Dino Hunter, Deer Hunter, Herculues, Frontline Commando 2, Eternity Warriors 3, and the list goes on. The most important piece of information is related to their newest game, Kim Kardashian:Hollywood. People seem to love Kim Kardashian and according to reviews on the app store it seems that everyone loves the game and its on the top 10 list of downloaded games. The game on its own has broken Glu Mobile's single-day revenue record with revenue soaring by 68% in the quarter to $49.9 million despite incurring a loss of $4 million. When GLUU came out with their quarterly report in the end of July it only accounted for 5 days of revenue from the Kim Kardashian:Hollywood game leaving a huge amount to be put on the books for the next quarter which could send the stock surging once more. Roughly 2 Weeks ago Cowen hiked its Price Target from 6$ to 10$.

    Final Analysis: Although their was a sell off after earnings I do not think Glu Mobile is a stock you should be selling. Over the next 6-12 months between the Kim Kardashian: Hollywood game, and Glu Mobile's determination to create new successful game after game, their diminishing competition and room to grow make GLUU an appealing buy at the current market levels.

    Disclosure: The author is long GLUU.

    Tags: GLUU
    Aug 11 10:13 AM | Link | 1 Comment
  • Apple: Buy, Buy, Buy


    Apple Apple Apple

    It's all we here these days! There is a perfectly good explanation for this. Apple clearly is a buy! For any kind of investor Apple could be a great position, whether your looking for a short or long term position Apple works. Long positions benefit a lot from the substantial dividend Apple dishes out quarterly to its shareholders. Furthermore, Apple is known as the most innovative and creative company in the entire world. Thus allowing the public to believe that the iPhone 6 and the iWatch and many further inventions will boost Apple's stock and continue its road to global dominance in the technology world. Risk? Many people are terrified to take risks, so if you're an investor who's looking to play it safe and wondering, should I buy Apple? The answer is yes, because even if somehow Apple's stock started to noticeably take a downturn, they have more then double the amount of money as the United States Government. Apple has roughly 160 billion dollars available and for investors this means, even if there was a downturn Apple can simply increase their dividends to keep shareholders happy and give the stock a bit of a surge or a momentum swing. I think Apple is a great investment for any kind of investor.

    PT - $110

    Disclosure: The author is long AAPL.

    Tags: AAPL, Tech
    Jul 15 6:06 PM | Link | 1 Comment
  • Glu Mobile Inc: Time To Buy !

    (NASDAQ:GLUU) Glu Mobile, Inc. has had a wild past 5 days as well as most stocks in the technology sector. Glu has risen roughly 30% in the past 5 business days as seen in the chart below.

    GLUU Price Chart

    Now this sudden surge from Glu may frighten many investors. Why? Glu exploded over the past week and many investors are wondering how much more room is there to grow. If it just rose 30% in 5 days how much more room is there for actual significant growth? There are 4 critical factors that investors should be aware of which make Glu a buy.

    A) Knowing the competition

    B) Earnings and Revenue

    C) Operations of the company

    D) The NASDAQ

    Lets start with (NYSE:A) the competition that Glu is facing. Two of Glu's top competitors are Zynga (NASDAQ:ZNGA) and King Digital (NYSE:KING). Zynga has seen a dramatic fall since mid March of 2014 when it was trading around $5.80 per share and took almost a 50% nosedive in a 3 month span. Furthermore, King Digital is still trading approximately 2$ under the IPO price of $22.50 despite a huge rally today for the company and for tech stocks. King Digital and Zynga are facing similar problems which Glu is not. King Digital and Zynga heavily rely on their apps in the app store to generate revenue. This isn't good because in modern times like today people get bored from a game and move on to the next. Zynga's 2013 revenue had 54% of it coming from just three titles (Words with Friends, Zynga Poker, and Farmville). In addition, King Digital the creator of Candy Crush Saga accounted for almost 80% of King Digital's revenue. Why is this a problem for companies like King Digital and Zynga? Many people think these companies are one hit wonders, meaning they create a few phenomenal titles and the company takes off but as soon as the hype dies down about their games, the companies are going down to. If these two companies accumulate such a large amount of revenue from such few things, it is not a positive sign. These games can't keep these companies going forever and need further innovation. As these are Glu's top two competitors, it seems like the competition is dwindling for them which is always a positive sign. KING Chart

    Now that we are aware of the competition that Glu is facing which doesn't appear to be strong, lets move onto another important factor (NYSE:B) which is the earnings and revenue of Glu. Glu in its Q1 of 2014 reported an EPS of $0.06 beating analysts expectations of $0.02. In addition, Glu Mobile also beat the analysts expectations for revenue in Q1 2014. Analysts were expecting a revenue of $39.45 million and was beat by the $44.6 million in revenue.

    (NYSE:C) The operations of Glu are different then Zynga and King. Glu continues to release new games that are also popular. Some of Glu's popular game titles are as follows; Knights of Puzzelot, Deer Hunter 2014, and Frontline Commando 2. These are contributors to Glu's revenue although the company doesn't solely rely on just these games for revenue. They have many other games as well. Furthermore, Glu just released a new popular game known as Kim Kardashian: Hollywood. This new game will see many downloads because it is about a famous figure (Kim Kardashian). In the Apple App Store it has received over 25,000 reviews and is rated 5 stars. This wouldn't be a one hit wonder for Glu Mobile but it can definitely assist in raising publicity for the company and could lead to an increase in revenue.

    D) The NASDAQ is extremely strong and is right around a 14 year high. With the NASDAQ prospering it definitely assists the growth of all technology companies including Glu Mobile. ^IXIC Chart

    Over the past year the NASDAQ has seen an eye staggering increase and there is no reason that this trend should see any imminent changes.

    I think that Glu is still a buy considering those 4 important factors which could result in significant room for growth. Although Glu has rallied and some investors may have missed riding the wave, Glu isn't done growing. I set a price target of $6.50 for Glu expecting good results for Q2 2014.

    Disclosure: The author is short GLUU.

    Tags: GLUU, Technology
    Jul 14 1:39 PM | Link | 4 Comments
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