Outperform - Price 12.76 on June 9
by Pacific Crest

We're raising our estimates after the E3 [electronic entertainment expo in Los Angeles], based on increased confidence in Activision's upcoming slate. We believe the introduction of DJ Hero [a music videogame] and reintroduction of Tony Hawk [a skateboard game] require higher dollar estimates than we previously assumed, among other adjustments. Our 2009 revenue and earnings-per-share estimates go to $4.90 billion and 67 cents, from $4.85 billion and 65 cents....We are initiating 2010 estimates ... of $5.30 billion and 78 cents. Our target goes to 15, or 19 times our new 2010 EPS estimate, from 13. Most of the 2010 growth in our model comes from a stronger catalog in the first half, given our positive stance on Activision's new opportunities for the second half of 2009. We believe it is shaping up to be another strong year. Market cap: $17.3 billion.

solid gaming stock

sell

"No, I'm not a fan of any of the game makers. If you want to be in that business, you want Gamestop (GME)." ("Mad Money Lightning Round," 4-29-09)

Large thesis about upcoming Diablo 3 release and good balance sheet.

From a recent Mad Money show:"I've got stocks like Verizon (VZ) yielding 7%, I can't go down that road. This market is too awful for that."

games for young adults

Killer games high profit talented developers. Bad economy stay home save money play XBOX.

games

Best of breed.