I have recently discussed many stock groups that are actually finding tailwinds in the Coronavirus economy. That includes Streaming Stocks, Pharma, Discount Retailers, Fitness @ Home, and finally Work @ Home tech stocks.

However, few groups are scoring as well with investors as video game makers because long ago they made the shift to online. This may be bad for GameStop, but its great news for these companies to thrive as the stay @ home trend continues.

Now let’s dig into the specifics of why each of these stocks is rated as a Buy from our exclusive POWR Ratings model:

Electronic Arts (EA)

It was not long ago when EA enjoyed a near-monopoly on sports video games.  EA has since branched out to other gaming genres.  This expansion has served investors quite well.  Take a look at EA’s 5 and 10-year charts and you will find the stock has generally moved upward with a few temporary dips here and there.

EA titles like Madden Football, FIFA Soccer, Need for Speed and The Sims are nearly recession-proof, especially amidst the coronavirus pandemic that forces people indoors.  In other words, it is quite possible EA’s spike in sales due to the COVID-19 outbreak will send its stock beyond its 52-week high of $114.13.  Though the stock is currently priced slightly above the important psychological benchmark of $100, the average analyst price target is $118.90, meaning there is plenty of room for EA to move upward. Plus it scores well across all 5 elements of the POWR Ratings with A (Strong Buy) for Industry Rank and Trade Grade. Then B (Buy) for Buy & Hold, Peer Grade and Overall rating.

(EA was recently a pick inside the Reitmeister Total Return portfolio before taking a handsome profit when shares rose to $106.73. I probably will add shares back on any future dip. To see the current portfolio, then start a 30 day trial to Reitmeister Total Return).

Activision Blizzard (ATVI)

ATVI is one of the most revered companies in the video game industry for good reason: ATVI games have true mass appeal and sell better than most others.  This is precisely why ATVI’s stock price did not decrease nearly as much as others during the coronavirus sell-off.  ATVI started the month around $60, dropped down to $52 then bounced right back up to its current price of $60.  The stock is only $4 away from its 52-week high of $64.53.

Zacks reports ATVI is ranked in the top 11% of the Toys, Games and Hobbies industry largely because the company continues to add to its library of content rather than rest on its laurels.  ATVI executives have mastered the art of boosting revenue while keeping costs in check, making the stock the perfect addition to just about every investor’s long-term “buy and hold” portfolio. This strength shows up in a hand full of Aces:

A for Trade Grade

A for Buy & Hold Grade

A for Industry Rank

A for Peer Grade

A for Overall POWR Rating

Take-Two Interactive Software (TTWO)

The majority of stocks endured a brutal March due to the COVID-19 outbreak.  Toy and video game stocks were some of the rare exceptions to this trend.  In particular, TTWO shone bright, rising more than 10% in the month.

Though professional athletes have been sidelined for weeks, NBA ballers partook in a popular NBA 2K video game tournament televised on national TV last week.  The NBA 2K series is a key component of TTWO’s gaming library.  TTWO’s ability to buck the trend is a large part of why TipRanks’ analyst rating consensus is 13 buys, 3 holds and zero sells with an average price target of $136.93.

Zynga (ZNGA)

Mobile games have quickly become uber-popular, especially now that the masses are trapped indoors and staring at their screens.  After all, one can only text, watch TV and surf the web for so long before turning to other forms of entertainment.  ZNGA’s mobile games will inevitably sell at a higher clip as people explore new avenues to kill the time spent indoors as a result of the coronavirus outbreak.

However, unlike video games that require the use of a TV screen, ZNGA’s games can be played outdoors as they are enjoyed on mobile devices.  This means there is the potential for ZNGA titles such as Words With Friends, CSR 2, Zynga Poker and Game of Thrones Slots Casino to sell like hotcakes long after the coronavirus pandemic ends.  At the moment, ZNGA is merely 60 cents away from its 52-week high of $7.42.  Follow the advice of the analysts as detailed by TipRanks, ride the ZNGA wave and your shares of this up-and-coming stock just might eclipse the $8 mark before the coronavirus pandemic comes to an end.

Want more great investing ideas?

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Reitmeister Total Return portfolio – Learn Steve Reitmeister’s strategies and current picks that work in bull and bear markets alike.

EA shares closed at $105.80 on Friday, down $-1.00 (-0.94%). Year-to-date, EA has declined -1.59%, versus a -13.06% rise in the benchmark S&P 500 index during the same period.

About the Author: Steve Reitmeister

Steve is better known to the StockNews audience as “Reity”. Not only is he the CEO of the firm, but he also shares his 40 years of investment experience in the Reitmeister Total Return portfolio. Learn more about Reity’s background, along with links to his most recent articles and stock picks. More...

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