Katje's Stock World

Comcast's Syfy Network And Trion Worlds Potentially Changing Video Game Industry With Defiance

2013-04-12T22:05:00.003-04:00

On Monday, Syfy Network will premiere its new show "Defiance". The unique part about this new show from Comcast (CMCSA) owned Syfy is its accompanying video game. This isn't a video game based on a tv show, or a tv show based on a video game. The two are connected and will give players and viewers the most unique experience.

The video game from Trion Worlds is the first to connect to a television show at the same time. Players will have new missions after every episode airs and will have an impact on the show's storyline based on gameplay. By connecting to the television show, Trion can release downloadable content (DLCs) and gain additional revenue.

The show is set in the future in the town of Defiance, similar to St. Louis. "Defiance" is complete with aliens, post war survival, and human struggles. The show will provide a lift to the network that has struggled to showcase original content since "Battlestar Galactica". The channel now counts on reality shows to gain viewers.

There are 13 episodes scheduled to air between Monday and July 8th. A huge budget of over $40 million was spent on the first season. The show was paid for by Comcast and Trion Worlds. Syfy is hoping for a renewal if ratings are strong. Trion has already begun working on a follow up game based on a second season.

The potential for Comcast and its Syfy network is huge. Back in 2009, Syfy charged $0.21 per subscriber to large cable companies. With a declining fan base and viewers, the network has even turned to WWE (WWE) to showcase "Smackdown" on its network. "WWE Smackdown" is shown on Fridays and most recently had 2.52 million viewers.

"Defiance" has also already seen several international pickups, providing additional revenue for Comcast. The show will also air in Brazil, Canada, France, United Kingdom, Ireland, Germany, Spain, Portugal, and Australia.

The Defiance video game was released this month and has seen strong sales for a new brand. According to VGChartz.com, the game has sold 170,000 copies on XBOX360, 70,000 copies on Playstation 3, and 50,000 copies for the PC. Sales remain strong and the game is currently on Amazon's top 100 selling video game list. The game will likely see strong sales this week as the show airs.

The impact on the video game industry could be huge. Two companies recently released games based on AMC's (AMCX) "The Walking Dead". "The Walking Dead", which is the most popular show on television, saw releases from Telltale Games and Activision (ATVI). The Telltale version, which follows an episodic storyline has sold 400,000 copies on the XBOX360 and 250,000 copies on the Playstation 3. The Activision version titled "Survival Instinct" has sold 210,000 copies on the XBOX360 and 140,000 on the Playstation 3.

Imagine that if "Defiance" is successful, television shows following video games will start popping up. Old franchises like Mortal Kombat, Street Fighter, and Resident Evil could all see a boost in game sales with a new version surrounding a television show. A successful "Defiance" could also lead to a buyout of Trion Worlds by a larger company. The video game company is partially owned by Comcast, Time Warner (TWX), and the Ontario Teachers' Pension Plan.

As "Defiance" airs on Syfy Monday, it won't be just science fiction fans watching, but an entire video game industry. This new move by Trion Worlds and Syfy could be just the boost the declining video game market needs.

The potential winners to watch in this video game/television partnership are:

Comcast-company owns the Syfy channel and will be able to charge other cable networks more in subscriber costs thanks to higher viewer numbers.
Time Waner-owns Mortal Kombat, Batman Arkham brand which could also translate well from a television series and game concept.
Activision Blizzard-has large library of games and cold make a play into this avenue. Could also utilize strong bases with its MMORPG games and turn them into televisions shows.

The biggest winners in this new format could be the video game consoles. Consider investing in Sony (SNE) or Microsoft (MSFT). Both have new consoles hitting the market soon, but could see a lift in current games with a television following. A new audience of video game players could emerge from shows like "Defiance". Shows like "American Idol" and "Dancing with the Stars" don't just do well for the talent. It is the human interaction where people have an attachment.

*Disclosure-Chris is long Activision Blizzard (ATVI)

Anger Management Week 4 Numbers Rebound

2012-07-22T01:05:00.004-04:00

An appearance from Denise Richards on Week 4's episode of Anger Management seemed to help ratings. Anger Management ratings were up amongst men and women in the Charlie Sheen comedy in its fourth week. Denise Richards, Charlie's ex in real life, played a woman who didn't believe in Sheen's character's profession, therapy. Sheen stars as a former baseball player (a stretch from the former Major League
character "Wild Thing") who had an anger problem while he played.

The Week 4 episode of Anger Management saw 2.65 million viewers. The show continues to be strong in the much coveted 18-49 age range. The key advertiser demographic saw 1.42 million viewers. With two episodes premiering in its first week, the show is now 5 episodes into its debut season.

Two weeks ago, I wrote about Week 2's ratings of Anger Management dropping. Week 3 saw similar declines in viewers. This set up poorly for Lions Gate Entertainment (LGF), the company behind the Anger Management television show. Lions Gate has commitments for 10 episodes already and has signed multiple international broadcasting deals for the new Charlie Sheen comedy. As I wrote before, Lions Gate also has a pending deal for 90 episodes of Anger Management if it can sustain certain viewer milestones throughout the first ten episodes.

Earlier I also wrote that Lions Gate and News Corporation, the owner of FX Channel, were Winning With Charlie Sheen. Both companies have large television and movie presences. A 90 episode television show could benefit both companies. The way the deal is set up is to save money for the studio as well by shooting a more rapid schedule to get all episodes done as fast as possible. With international rights already being signed at a rapid pace, Lions Gate could really cash in with a 90 episode deal.

*Disclosure - I Own Shares of LGF

Will Dreamworks Animation Win in its Bid for Classic Media?

2012-07-21T20:44:00.000-04:00

On Wednesday, I reported that Dreamworks Animation (DWA) was set to acquire Classic Media. Classic Media is the owner of a large library of cartoon characters. Some of these characters have been turned into television shows or movies. No official decision has been made by either Dreamworks Animation or Classic Media.

The key brands owned by Classic Media include:

Archie
Casper the Friendly Ghost
Dick Tracy
Frosty the Snowman
George of the Jungle
Godzilla
Gumby
He-Man
Lassie
The Lone Ranger
Rocky & Bullwinkle
Rudolph
Veggie Tales
Where's Waldo

The big reason for the buyout is licensing power from Dreamworks Animation. Cinema Blend reported that Classic Media made $376 million in licensing revenue last year. Dreamworks is reportedly buying Classic Media for a low price tag of $150 million. With that low buyout offer, why hasn't another acquirer emerged? Are the brands too low quality for Disney (DIS) or another movie studio to get involved? Why no Iconix Brands (ICON), a company that owns brands normally licensed to clothing companies? I recommended Iconix back in an October article.

Dreamworks Animation has already announced it will be making a movie based on Classic Media characters Mr. Peabody & Sherman. The Mr. Peabody & Sherman movie is set to be released in 2014. Rob Minkoff (Lion King) will write and direct the animated movie. Ty Burrell (from Modern Family) and Max Charles (young Peter Parker in the newest Spider Man) are set to play the title characters. Surely, Dreamworks didn't pay $150 million just to gain the Mr. Peabody & Sherman brand.

I also discussed in the above article that Dreamworks Animation could be making the acquisition of Classic Media to help boost its character offerings at its recently announced theme park launch.

An official announcement should come this week as to who will own Classic Media. When that announcement is made, Dreamworks should see a nice bump in share price and could pick up some analysts upgrades.

Stem Cells Has Huge Week

2012-07-21T19:36:00.000-04:00

I wrote an article on Stem Cells (STEM) for Seeking Alpha last week. The article (found here) talked about how the stock ran up from results of an Alzheimers study. When that article was published, shares were up 70%, before they ultimately were up over 100% in one day. The stock is a "penny stock", with a price under $5 a share, and saw huge volume that led to the large percentage increase.

From StemCells website, here is the current pipeline:

Spinal Cord Injury - Clinical Development

PMD - Clinical Development

AMD - Pre-Clinical

Alzheimer's - Pre-Clinical

Stroke - Pre-Clinical

Liver Metabolic Disorders - Pre-Clinical

Hepatitis C - Research

As you can see, StemCells is working on different areas of the body focusing on the eyes, spinal cord, and brain. These all represent areas critical to survival for humans. The areas are all also underserved by the medical community with treatments.

Are you looking for small biotech companies that could jump on positive news? Follow along with my monthly newsletter coming in Auguust or September. The newsletter will be free or under $5 a month. You can email me at stockworldpicks@gmail.com or follow this site for more information. The newsletter will have an area dedicated to drug stocks. Sample trackable portfolios will also be included, where StemCells will most likely have a position for the long term.

Buy Stock in Manchester United Football/Soccer Team

2012-07-11T20:19:00.000-04:00

"Glory, glory Man United
Glory, glory Man United
Glory, glory Man United
As the reds go maching on"

Manchester United fans in North America will soon have a chance to stand behind their favorite team and buy shares.

The English Premier League team owned by Malcolm Glazer,
will be selling shares on a North American stock exchange to raise money to pay off some of the team’s debt. The famous team, which has been home to Wayne Rooney, Christiano Ronaldo, George Best, and David Beckham, is the most valuable soccer team in the world according to Forbes Magazine. Check out my IPO Preview below:

Investors Should Say Glory Glory to Manchester United Shares

If you want to receive IPO previews ahead of the game, email stockworldpicks@gmail.com to sign up for my upcoming monthly newsletter.

Man UTD Forever

Buy This at Allposters.com

Video Game Industry in 2013

2012-07-11T19:19:00.002-04:00

Anyone who follows my posts on Seeking Alpha or on this blog may know by now that I write about the video game sector a lot. I do not own a video game console or play video games, so where does this knowledge and love for video games come from? Well, it might be that at present time I own shares of three video game companies (ATVI, COOL, THQI). Despite a move away from hardware titles to social, mobile, and digital games, consumers are still buying big blockbusters every year. I wrote an article on Seeking Alpha recently ("Investing in the Video Game Sector in 2013") that provided an early look at blockbuster titles that will be coming out next year.

CNBC provided a list of The Ten Most Anticipated Video Games for 2013:

Grand Theft Auto V

Gears of War: Judgment
Bioshock Infinite
Destiny
Watch Dogs
Tomb Raider
The Last of Us
God of War: Ascension
South Park: The Stick of Us
Sim City

The list is anticipated video games and not necessarily the biggest selling, see the article above for my take on each company affected.

Recently I wrote about starting a monthly stock newsletter. I am looking at doing a free monthly newsletter that would be paid for with advertisements. If there are not ads, I would most likely have to charge a small fee ($5?) per month or an annual rate ($50?) to subscribers. Video games will be one section of the newsletter and could help investors looking to enter the space and learning about upcoming titles and how video game stocks can have wide swings, where investors can prosper. I am collecting email addresses for the yet to be launched newsletter, there is no fee to be added to the list. If there is a monthly fee, you'll know ahead of time, and besides anyone who sends their email before the launch would receive a discount anyways. Send emails to stockworldpicks@gmail.com.

*Disclosure - I Own Shares of ATVI, THQI, COOL*

Lions Gate Splits Mockingjay Into Two Films, The Hunger Games Trilogy Becomes Four Blockbuster Movies

2012-07-11T13:08:00.000-04:00

Hunger Games -...

Buy This at Allposters.com

Lions Gate Entertainment made the smart decision to split up the third Hunger Games book into two movies. Mockingjay will be released as two movies in 2014 and 2015. The release dates for all of The Hunger Games movies have now been made official. Official release dates are:

Catching Fire: November 22, 2013
Mockingjay Part 1: November 21, 2014
Mockingjay Part 2: November 20, 2015

This decision...

now extends the Hunger Games movies into one release every year from 2012-2015. It also gives Lions Gate a chance to make the book series more well known internationally. The first Hunger Games movie had a higher box office revenue than any Harry Potter or Twilight movie in North America. The Hunger Games box office overseas was relatively strong for a first movie in a trilogy, but could definitely help Lions Gate stock with a huge Catching Fire release.

Apart from The Hunger Games, Lions Gate also has Ender's Game. Ender's Game is being made into a movie and will likely turn into a series as there are many books in the famous sci-fi series. Read my latest reveiw of Lions Gate Entertainment stock here.

*Disclosure-I own shares of LGF*

Fender Guitar IPO Preview

2012-07-11T12:48:00.000-04:00

Guitar maker Fender is set to test the public markets with a 10.71 million share IPO. The company is set to sell shares in a price range of $13 to $15.

Brands owned by Fender include:

Fender
Squier
Jackson
Guild
Ovation
Latin Percussion

Fender also is the North American distributor for Sabian cymbals, one of the largest percussion companies. Fender guitars have been played

by legends like Eric Clapton, Jimi Hendrix, and Bruce Springsteen. The market may find guitars to be a luxury item and European weakness may hurt the IPO. Read my complete IPO preview below

Fender IPO Preview

Fender - Rock On

Buy This at Allposters.com
Fender - Strat...

Buy This at Allposters.com
Classic Guitars

Buy This at Allposters.com

The Walking Dead Video Game Coming From Activision

2012-07-09T14:52:00.000-04:00

Activision added one of the most popular television shows to its lineup of 2013 video games. The Walking Dead, which airs on AMC, hit record numbers for its Season 2 Finale. The show has increased in popularity over its 19 episodes. The third season premieres in October on AMC. There already is a episodic game put out allowing players to play a two hour scenario each month involving the characters of The Walking Dead. You can buy that game for $24.99 below for PC or Mac. I also wrote an article on how to trade AMC and ATVI (Did Activision Score a Blockbuster With The Walking Dead Video Game Rights?).

*Disclosure-I Own Shares of ATVI*

Top Ten Stocks for 2012 Mid Year Update

2012-07-09T02:37:00.003-04:00

Hard to believe that 2012 is officially half way over. That means its time to check in on my annual top ten stock picks for the year. Follow the link to see results.

Overall, my ten picks were up 20.66% for the first half of 2012. I outlined the results and what I expect for the rest of 2012 in an article here. Listed below are the returns:

Activision Blizzard (ATVI) -1.0%
Dreamworks Animation (DWA) +14.8%
Exact Sciences (EXAS) +32.0%
Ford (F) -9.9%
Hexcel (HXL) +6.5%
IMAX (IMAX) +31.1%
Local.com (LOCM) +14.2%
NCR (NCR) +38.1%
Seadrill (SDRL) +12.4%
Vertex (VRTX) +68.4%

As you can see eight of the picks were positive and two trade below their starting points. Ford seems to be beaten down by the European economy and could stay that way for some time. Vertex has been the biggest gainer and has actually retreated from the 100% gains seen a couple of months ago. Which stock do you think will end the highest percentage up in 2012? Will it continue to be Vertex or will a different pick take off? Please vote in my poll on the right hand side.

Also, if you're looking for great stock picks and returns, consider signing up for my unreleased newsletter. Email me at stockworldpicks@gmail.com to get your name put on the list.

Thanks for reading and I welcome feedback as I worth through changing the layout of this site.

*Disclosure-Author has long positions in ATVI and F*

Click here to buy posters at Allposters!

Are Anger Management's Week Two Ratings a Worry for Lions Gate

2012-07-09T02:21:00.001-04:00

When Anger Management debuted on FX two Thursday ago, it broke records for a cable comedy premiere. The show recieved a lot of press and hype thanks to it being Charlie Sheen's first show since his well publicized departure from Two and a Half Men on CBS. I also wrote about the show on Seeking Alpha in an article entitled, "Lions Gate and News Corporation Winning With Charlie Sheen".

In its first week on the FX channel, Anger Management premiered two episodes with 5.47 million (9PM) and 5.74 million (9:30PM) viewers. Last week, the show suffered declining numbers in its second week. Thursday's episode had "only" 3.37 million viewers, suffering a drop of over 35%. The show did however...
score big once again with the coveted advertiser demographic 18-49 year olds. In the coveted age group, the show was seen by 44% more people than the debut week.

So what do these numbers mean for Lions Gate, the company that owns Anger Management? Well, Lions Gate has already ordered a second season of the show about an anger therapist, played by Charlie Sheen. The company also has a pending deal for 90 episodes if certain ratings milestones are released. The milestones are not public information, but I can't imagine that they are record breaking. The premiere episode will not count in the milestone numbers, so Lions Gate needs to hope rates increase or at a minimum stop dropping week to week. After two weeks there is no need to panic, besides the show is already going international.

A new deal was signed with Lions Gate for ther rights to Anger Management in England. Comedy Central UK will air the show in Autumn of 2012, after securing the rights from Lions Gate. This deal now marks a list of countries that have already bought into Charlie Sheen and his "winning" ratings numbers. Comedy Central UK also has the rights to Two and a Half Men episodes in its country.

Other countries and territories who have rights to Anger Management are:

Canada
Germany
Latin America
Scandanavia
Benelux (Belgium, Netherlands, Luxembourg)
Australia
New Zealand
Poland

Time will tell if Anger Management is renewed for all 90 episodes. The show airs on FX Channel on Thursdays at 9PM. There is no need for Lions Gate investors to panic as the company's main bread and butter is movies. The television segment is growing its share and Anger Management is a big bonus if it could hit the huge 90 episode guarantee.

UFC Heading to China

2012-07-05T02:50:00.001-04:00

Today, the Ultimate Fighting Championship announced it will be heading to China. The most populous nation will see UFC fighters in person on November 10th. The fighters will hold their competition at the Cotei Arena in front of 15,000 people. Macau is the popular gaming area near mainland China. Gambling is legal and has been popularized in the region. I wrote recently about one of the biggest players in the Macau market. See the article here:

-Melco Crown (MPEL)

The UFC continues to expand its global dominance. Recently the league returned to Brazil, where some of its most prominent fighters reside and/or train. The UFC also signed a deal with News Corpoartion to showcase some fights on FX Channel and FOX. The company's hit reality show "The Ultimate Fighter" also made the switch from SPIKE to FX.

-UFC Deal with Fox (NWS)

The UFC continues to be the fastest growing sport in the World and should continue its global expansion and dominance with a deal in China. Unfortunately there is no way to capitalize on the UFC exposure. Unlike rival Worldwide Wrestling Entertainment (WWE), UFC is not traded on a stock exchange.

Subway: Eat Fresh, Drink Vitamin Water Zero

2012-07-03T13:10:00.001-04:00

Coca-Cola continues to expand its line of non carbonated beverages. The company, most famous for its original Coca-Cola brand, has shifted its focus to healthier options like Powerade and Vitamin Water. Today Coca-Cola announced a deal to bring its popular Vitamin Water brand into Subway stores.

The new deal will see customers in Subway able to purchase Vitamin Water Zero beverages. Vitamin Water had a market share of 1% in the noncarbonated beverage market (Beverage Digest). Sales of Vitamin Water Zero saw sales growth of 28% last year. The deal is for Vitamin Water Zero brand only, keeping the full calorie Vitamin Water bottles out of Subway stores. Two flavors, Lemonade and Acai Blueberry Pomegranate, will be offered in stores. Subway began testing sales of the bottles over the last several years. Along with Coca-Cola on fountain, Subway also offers Minute Maid, Powerade, and Dasani beverages in bottles. With 25,000 locations, Subway is the largest restaurant chain in the United States.

Vitamin Water was purchased in 2007 for $4.1 billion by Coca-Cola. The acquisition was part of beverage companies shifting to alternative drinks as consumers move away from carbonated beverages. Rival Pepsi acquired Sobe and Gatorade brands. Considered rich at the time, the acquisition has allowed Coca-Cola to expand from carbonated beverages into alternative options like bottled water, flavored water, and juice drinks.

The push into Subway with Vitamin Water also strengthens Coke’s restaurant business. The company competes with Pepsi in the restaurant fountain beverage industry. Pepsi has YUM Brands, which includes Taco Bell, Pizza Hut, and KFC. YUM Brands is the largest restaurant chain by number of stores in the World. Coca-Cola has its fountain machines in McDonald’s, Burger King, and Subway. Subway and McDonald’s are the two largest restaurant chains in the United States. Coke is also experimenting with its Coca Cola Freestyle machine, which allows customers to choose from individual flavor combinations. A recent article points out the benefits of the new machine and how it could transform the restaurant fountain industry.

Important Announcement

2012-06-08T16:08:00.002-04:00

Over the next week, I will welcome my first child into this world. During this exciting time, I will not be around a computer and will not be active on this blog or Seeking Alpha. I will have some time off from work and will be completely redesigning my stock blog and updating it during my time off.

In the meantime, I want to thank anyone who has read this blog or any of its posts on a regular or short term basis. I am in the process of creating a monthly stock investing newsletter. The newsletter will be a complete guide to the market and will have many subsections including:

New Stock Ideas
Stocks Under $10
Dividend Ideas
Top ETFs
Earnings Analysis
Stocks I Own

I have not decided on whether the newletter will be free (ad-supported) or a subscription basis. I am wondering if anyone would like to start the conversation here or in an email of if they would read the newsletter and how much they would pay.

The newsletter would also include the first look at my Top Ten Stock Picks, which have been huge winners for anyone following me.

Also, anyone who emails now will receive first priority and a discounted rate if it is a subscription basis.

Please email with your interest at: stockworldpicks@gmail.com

Thanks,

Chris

Tria Beauty Set to Price Their Initial Price Offering This Week

2012-05-22T00:30:00.001-04:00

Read my latest IPO writeup. This week we center our focus on Tria Beauty. The maker of at home hair removal and acne removal products is set to go public this week.

Tria Beauty (TRIA) is set to go public by offering 4.6 million shares at a price point of $13 to $15. The initial price offering is being underwritten by Morgan Stanley (MS), Piper Jaffray, and Wells Fargo (WFC). With a total share count of 19.2 million (19,294,722), the company's market capitalization would be $270.1 million (based on mid range of $14 a share). After the offering, directors of Tria Beauty and owners of more than 5% would own 58.4% of the company.
Tria Beauty is a leading over the counter medical device maker in the beauty segment. The company offers, "easy to use, FDA-cleared medical devices to consumers that deliver results comparable to professional aesthetic treatments at a fraction of the cost." Continue Reading

Here's a look at the company's two leading products and a newer product as well:

2 Great New IPOs to check out

2012-05-14T01:03:00.000-04:00

Over the past few years, I have switched most of my stock writing over to Seeking Alpha. Each month on that site I contribute articles on stocks that I feel are worth watching or buying. For anyone who has followed me on this blog or the Seeking Alpha community, you have seen many of those picks create great value for anyone who took my recommendations. Initial price offerings are companies who come to the public market. The investments are risky as many of the shares are held by private equity and are hard to acquire during the first public day.

Here are two recent IPO write-ups of stocks I think worth checking out after they go public.

Ignite Restaurant Group - Is the company behind the Joe's Crab Shack and Brick House Tavern + Tap Brand

T.I.M. WE - Offers Mobile Markeing, Mobile Money, and Mobile Entertainment in over 75 countries around the world.

THQ Raises Earnings Guidance and Stock Soars

2012-04-21T21:14:00.000-04:00

Just a short time ago, THQ Incorporated (THQI) received a delisting notice from the Nasdaq if it could not maintain a price above a $1 a share. Shares have not seen a $1 since December of 2011 but appear destined to hit the key share price after upbeat earnings from the company.
The fourth quarter loss will now be smaller than the company and analysts once projected. The net loss is expected to now be in the $0.10 to $0.20 range. Previously, the loss was predicted to be in a range of $0.35-$0.50. Net sales will now be reported as $160-$170 million versus projected $130-$150 million.
Saints Row: The Third sales greatly increased once the company did several price cuts to attract buyers. The uDraw segment has weighed down shares and hurt revenue. Stronger sales of the UFC Undisputed game also helped the earnings beat. A blog post I wrote back in January highlighted the new UFC game and the company’s potential. Here’s a look at sales of some recent releases:

North America/Europe/Japan/Rest of World/Total

UFC Undisputed 3 XBOX 360 0.36million 0.08 million 0 0.04 million 0.49 million

UFC Undisputed 3 PS3 0.28 million 0.12 million 0.01 million 0.06 million 0.48 million

Saints Row 3 XBOX 360 0.89 million 0.92 million 0.03 million 0.22 million 2.07 million

Saints Row 3 PS3 0.55 million 0.69 million 0.09 million 0.28 million 1.62 million

Saints Row 3 PC 0.07 million 0.11 million 0 0.03 0.21 million

Sales figures from www.vgchartz.com

Earnings will now be reported on May 15th and this could lead to an increased share price once guidance for the rest of the year is reported. An update on the game release schedule could also push shares back over $1. The company will also report $76 million in cash balances. Along with its cash balance, the company still maintains a $50 million level of credit that can be utilized to release several games in 2012 and 2013.

The company will likely update the status on the highly anticipated Darksiders II game. The game will be a follow-up to 2010’s Darksiders, which sold close to a million copies on the XBOX 360 platform. The company’s recent UFC game is also helping earn the company additional revenue with downloadable character packs, including the recent International Fighters pack. The WWE games also have made extra money from downloadable character packs. In my recent blog post, I also mentioned how the company was expanding into social gaming including UFC and Margaritaville.

The fifty two week share price of the company is a wide $0.45-$4.67. Shares once traded for over $35 a share. I bought shares of this stock under $1 as I believe the company is producing enough money from several minor hits to keep its studio going. New releases will power the company further along or will lead to a buyout. A buyout is also very realistic as larger Take Two (TTWO), Electronic Arts (EA), or Activision (ATVI) looks to strengthen its portfolio and will gain the Saints Row, Darksiders, and UFC brands as well as others. I remain bullish on shares of THQI and think they are worth buying below a $1 a share.

*Disclosure - I own shares of THQI and ATVI

Buy the Company Behind the Tupac Hologram

2012-04-19T23:34:00.000-04:00

Over the weekend, attendees of the annual Coachella Music Festival were treated to a suprise appearance from Tupac Shakur. Now I know what you're thinking, yes Tupac was shot and killed in 1996. This Tupac was a hologram that was made by Digital Domain Media Group (DDMG). The Tupac hologram performed "Hail Mary" and "2 of Amerikaz Most Wanted" with Snoop Dogg.

Digital Domain Media Group went public in November of 2011. The stock is trading below its IPO price, even with a nice runup from the Tupac hologram. I wrote an article on Seeking Alpha today analyzing other parts of the business and the potential for other holograms.

Check out the article here.

*Disclosure - I own shares of Digital Domain Media Group*

Recommended Stock Dreams Incorporated (DRJ) Receives Buyout Offer From Fanatics

2012-04-16T22:43:00.000-04:00

Today, one of my most recommended stocks over the last year on Seeking Alpha shot up 30% from a buyout announcement. Dreams Incorporated, owner of the Fansedge.com website and other sports assets, was offered a $3.45 per share buyout from Fanatics.

In my most recent Dreams article on Seeking Alpha, I recommended buying shares while they were trading at $3.04. In that article I gave a price target of $4.00. In an earlier article, I recommended buying shares when they traded at $2.16. Buying shares at either of those prices would have yielded a nice short term profit for readers.

Here is a look at Dreams articles I have written:

July 31st 2011 - 15 Companies Breathing a Sigh of Relief From the New NFL Deal
Share Price $2.63, Price Target N/A

December 2nd 2011 - Dreams Incorporated is a Double in 12 Months at Today's Share Price
Share Price $2.19, Price Target $4.00

December 23rd 2011 - A 12 Stock Tim Tebow Portfolio for the Holidays
Share Price $2.30, Price Target N/A

March 19th 2012 - Nike, Dreams Incorporated Big Winners in Peyton Manning Sweepstakes
Share Price $2.85, Price Target N/A

March 30th 2012 - Web Syndication Deals, Growing E-Commerce Will Help Dream Shares Jump
Share Price $3.04, Price Target $4.00

All these articles offered entry points below today's buyout price. If you read my articles here and are not familiar with Seeking Alpha, you should make the jump over there. On Seeking Alpha, I offer many more in depth articles with trading recommendations. Head over to the site, sign up and begin following me so you can profit from your trading.

A Stock That Can Benefit From The Mega Millions Jackpot

2012-04-11T12:20:00.000-04:00

I played the Mega Millions several weeks ago when it crossed the $500 million mark. Like others, I had dreams of how to spend the money once I won. Buy a boat, pay off the house, finally invest millions, travel the world, and the list goes on. Unfortunately I did not cash in and am left without the millions of dollars. I did however find a company that could hit the jackpot from the increased numbers of players.

Scientific Games holds the rights to nine state lotteries and is also one of the largest instant scratch off ticket producers in the world. This article will point you in the right direction in this winning stock pick.

Scientific Games Could Benefit From Mega Millions Jackpot

Facebook's Instagram Acquisition Doesn't Add Up

2012-04-09T20:47:00.000-04:00

While the market was hit with jobs data and the indexes dropped, a rather large acquisition was gaining the attention of the stock markets, Twitter, and private equity websites around the country. The announcement of Instagram’s acquisition by Facebook (FB) for $1 billion in cash and stock seemed to set off news of an overpayment by the company. With Facebook set to go public in May, the deal appears set to make sure Facebook is the place to log into and share photos. Facebook Chief Executive Officer and Founder Mark Zuckerberg shared the acquisition with Facebook users. In a letter Zuckerberg discussed how Instagram will create the best photo sharing experience for Facebook users.

Facebook will keep the Instragram company separate from Facebook and will keep its staff of thirteen people. Zuckerberg already discussed that he will allow Instagram users to share pictures on other social networks including Google’s (GOOG) Google+. It will be interesting to see how long this independence lasts and if Facebook can find a way to make others pay for the service if not logged into Facebook.

Instagram began as an Apple (AAPL) product used on iPhones and iPads. The application quickly shot up the list of top downloads on iTunes. As of today, the application is still in the top ten free applications downloaded.

In April, Instagram opened its services to Google and the Google Play marketplace. In less than one day, the application has over one million downloads on the Android platform. We will have to wait and see how long it takes the Google Play marketplace to cross the ten million download marks but it appears to be only a matter of time.

The problem I have with the acquisition is there isn’t a real value for Facebook in the acquisition. Instagram currently does not charge for its application or service. The majority of the photos are uploaded on Facebook. Other services used are Twitter, Google+, and FourSquare. I think Facebook overpaid for Instagram and will eventually need to charge money for people to use the service. A billion dollars is a lot of money for any company to pay for an acquirer but Facebook is in a difficult position since they are going public soon. I have read through the Facebook S-1 and it was nice to see that they had some cash going into its IPO but now they have depleted much of their war chest. I have to agree with the writers who say that Facebook was scared and made the acquisition to prevent rivals from taking over Instagram and also to keep its photo sharing market strong.

Instagram was valued at $500 million in its most recent round of private equity funding. It is rumored that Twitter, Google, and Facebook all had approached the company about a buyout. It appears that Facebook won the race and may have likely paid more than the others were willing to spend on the two year old company.

Instagram has over 27 million users, according to TechCrunch, and is set to hit 50 million from the Android launch this past week. Twitter was blowing up today with tweets about people saying they would be deleting their photos and Instagram accounts because of Facebook’s takeover. The fact of the matter is that the buyout could actually cause a spike in the number of downloads for the application due to an abundance of free advertising in the media.

The acquisition marked the first of 2012 by Facebook. At a billion dollars it is also the highest price paid by Facebook for another company. The move also breaks away from Facebook’s normal strategy of acquiring companies for their employees rather than the intellectual property. Analysts call the move similar to the YouTube acquisition by Google for $1.65 billion. Google has found ways recently to monetize the site’s large number of daily views. Perhaps Facebook will find a way to make more money off of the millions of photos uploaded each month using Instagram.

Facebook will be the hottest IPO in May and the buzz now starts a little earlier with this acquisition. Facebook will likely talk about the purchase in subsequent conference calls as I feel analysts will want answers about the hefty purchase price. The deal likely makes the valuation on Facebook worth over $100 billion and puts the shares out of reach for this small time investor.

The Hunger Games Brings in $155 Million

2012-03-25T20:16:00.000-04:00

I have taken a long break from writing on this blog and recently began looking at new layouts and also some email newsletter options. In the meantime why not checkout some articles I have wrote about The Hunger Games. If you haven't looked into Lions Gate Films stock, here's what you have been missing.

Potential of an AMC/Lions Gate Merger

New Movie Franchise Hast the Potential to Transform Lions Gate Films - Recommended buying shares of LGF under $8

Lions Gate Acquires Summit Entertainment and Gets Twilight Franchise

The Hunger Games and The Avengers Added to 2012 Lineup

8 Companies Other Than LGF to Profit From The Hunger Games

Disclosure: I own shares of LGF and IMAX

Can Internet Sensation Dollar Shave Club Cut into Gillette and Schick's Amazing Razor Blade Margins?

2012-03-25T20:08:00.000-04:00

Dollar Shave Club was founded in 2011 but didn't start taking customers until last week. Over a short period of time, the company has popped up all over the internet with articles talking about whether the company can survive and to discuss the hilarious commercial made by the small five employee company.

It seems easy these days thanks to Netflix (NFLX) and Amazon (AMZN) that anyone can create an idea of something through the mail to make life easier for consumers. Netflix after all, was founded with convenience of the consumer in mind so they did not have to make trips to the movie store and could save money and time by receiving movies in the mail. Dollar Shave Club has utilized Netflix's model well by offering both convenience and money saving to its customers. If you haven't watched the video go to the company's website and check it out. Dollar Shave Club spent $4500 to make the video, which has over three million views across all sites. The video has over one million views on Youtube alone. The company is beginning to take advantage of social media as it saves its advertising dollars. The company has over 15,000 Facebook fans and 11,000 Twitter followers.
Three different price tiered plans are offered by Dollar Shave Club:
-The Humble: Twin Razorblade, $1 a month plus shipping and handling ($2), 5 cartridges a month

-The 4X: Four Blade Razorblade, $6 a month (shipping included), 4 cartridges a month
-The Executive: 6 Blade Razorblade, $9 a month (shipping included), 3 cartridges a month
All three plans come with a free razorblade handle. Customers are allowed to change plans any given month up or down in price.
The real question is whether Dollar Shave Club can cut into market share of Gillette, owned by Procter and Gamble (PG), or Schick, a subsidiary of Energizer Holdings (ENR). The 12,000 customers reported recently were all people who shaved before so they likely made the switch from Gillette or Schick razors. The real question is did those customers leave because of the pricing offered or because of clever advertising done by Dollar Shave Club.
The most recent quarter reported by Procter & Gamble saw the Gillette Fusion grow global market share for the 20th consecutive quarter since the product launch in 2006. Could Dollar Shave Club cut into the streak and prevent Gillette from enjoying more share gains during 2012. Gillette after all was the main target of the Dollar Shave Club video advertisement. In the ad, founder Michael Dubin mocks that $19 of the $20 spent on razor blades goes to Roger Federer. As a Gillette consumer, it does become frustrating that the company pays millions of dollars to Tiger Woods, Roger Federer, Thierry Henry, Derek Jeter, Andre 3000, Gael Garcia Bernal, and Adrien Brody to promote the company's products and star in the commercials. Along with spending millions of dollars on advertising, the company also pays to have the naming rights of Gillette Stadium, where the New England Patriots and New England Revolution play. The entire Dollar Shave Club company is based on the idea of not spending a ton of money on advertising and passing the savings on to the consumer. Perhaps Gillette could scale back on advertising. I find the opposite to be true as I think Gillette will actually spend more on advertising to compete with Dollar Shave Club. In a recent advertisement I saw, Gillette promised that one cartridge would last five weeks. Daily Mail, in the United Kingdom, once claimed that razor blades made by Gillette had a 4,750% markup.
Energizer Holdings has been adding products to its brand portfolio could be hurt the most if Dollar Shave Club takes off. The company's Schick, Edge, Skintimate, and American Safety Razor brands could all be hurt. Schick is the number two razor brand, behind Gillette, in the United States. Schick, which enjoys a number one position in Japan, should likely keep its dominance in the Asian country due to Dollar Shave Club's single country presence. Edge and Skintimate help Energizer maintain the number one position in shave preparation category. As Dollar Shave Club expands its brand portfolio, the shaving preparation items could lose market share. Energizer also recently paid $301 million to acquire American Safety Razor to help expand its presence in the wet shave category. The cheaper priced razors could be hurt by Dollar Shave Club.
After the video went viral, 5,000 people signed up for Dollar Shave Club's monthly service. No official numbers have been released but over 12,000 customers are now signed up for the service. Now, $12,000 a month isn't exactly a huge business but this could be just the start. The day the video premiered, many people couldn't access the website due to an overload of people visiting the site. Founder Michael Dubin said it best, "Our servers were not prepared for the bum rush", as he told Business Insider in an interview.
As a Gillette user, I find myself changing the blades less frequent than I should. Buying a new razor with a few blades seems like a cheaper option, even though the big pack of blades is the better value in the long run. It is frustrating to pay so much for something that is needed for personal hygiene. There is a reason that Gillette used to send out a free razor on your birthday. Razor blades have one of the biggest markups in the entire consumer industry. There is a reason it is called the razor blade model after all for any item that sells something cheaper upfront or at a loss and counts on additional spending. Amazon has used this model with the Kindle after all. Phone companies use this with providing phones for a cheaper price upfront to count on monthly revenue.
Also as a Gillette user and someone who changes their blades infrequently, it's hard to compare the cost savings. I did look around on the Dollar Shave Club website and found the middle $6 pricing to be a good value. Shipping and Handling is included and four blades are provided a week. The ability to change my blade once a week could be a benefit.
So as investors what does Dollar Shave Club really mean. I think the company will continue to signup users and could gain traction as it expands into other personal care products. I think the margins of Gillette and Schick will start to drop as the company may have to discount products to compete or at least maintain customers thinking of making the switch. I will be watching conference calls for Energizer and Procter and Gamble closely to see if they make note of the impact. Another option would be for one of the companies to buyout Dollar Shave Club. The ultimate death of Dollar Shave Club would come if either Procter and Gamble or Energizer starts their own by mail model.
What are your thoughts about Dollar Shave Club? How often do you change razor blades? Does the company have a sustainable model? Can the company expand with other products or into women's shaving markets? Share your thoughts on the subject below.

Top 5 ETFs for 2011

2011-01-03T21:22:00.000-05:00

For the past three years I have released a list of top ten stocks for the year ahead. This year I decided to do a list of the top ETFs for the year. Prices are from 12/31/10.

Listed in alphabetical oder by symbol:

ECH-Chile
$79.60

This ETF charges 0.61% and is offered by Ishares. The company invests in companies based in Chile. Utilities is the largest weighting with 23% of the ETF. Chile is growing and is expected to be one of the top Latin American regions for GDP growth in 2011. Look to get in on this growing country ETF as middle class rises.

MOO-Agribusiness
$53.54

This ETF charges 0.59% and is offered by Van Eck Global. The company has 47 holdings in the agriculture industry. The top ten holdings are Monsanto, Potash, Mosaic, Deere, Wilmar, Yara International, Syngenta, Archer Daniels Midland, Brasil Foods, and Agrium. The top three holdings are all around 8% of the ETF. The company has great exposure to food stocks and to agriculture equipment stocks as well. Agriculture stocks were up in 2010 and I believe they will continue to raise in 2011. This is a great fund to be in this next year.

PALL-Palladium
$79.86

This ETF charges 0.60 and is offered by ETF Securities. The ETF was introduced in 2010 and holds physical palladium. The precious metal is used in technology and in cars. The metal has had a nice runup and I believe that will continue in 2011.

XLK-Technology
$25.19

This ETF charges 0.22% and is offered by State Street. The company focuses on the technology sector.The company's top ten holdings are Apple, Microsoft, IBM, ATT, Google, Oracle, Cisco, Verizon, Intel, and Qualcomm. The company holds 85 stock positions (as of 12/31/10). I love the technology industry for 2011 as the talk of cloud computing and internet storage heats up. Apple is the largest holding at 12% so if you were thinking of investing in Apple why not get some exposure here plus the added safety and bonus of technology.

XLV-Healthcare
$31.50

This ETF charges 0.22% and is offered by State Street. The company holds 51 stocks in the healthcare sector. The company's top ten holdings include Johnson and Johnson, Pfizer, Merck, Abbott Laboratories, Amgen, Bristol Myers Squibb, Medtronic, UnitedHealthGroup, Eli Lilly, and Express Scripts. Johnson and Johnson makes up 13.63% and Pfizer makes up 11.25% of the ETF. Those two holdings are almost a quarter of the entire ETF. I like both of those stocks for 2011 and also like that the ETF has exposure to Gilead, Celgene, Genzyme, and Biogen. Look at this ETF for the healthcare rise in 2011.

Those are my top five ETFs for 2011. I will update throughout the year and may provide more ETF picks.

My Top Ten Stock Picks for 2011

2011-01-03T19:46:00.001-05:00

My Top Ten Stocks for 2011

This article marks the third consecutive year of picking ten stocks for the year. The results from the past two years have been great and can be found here:

2009

2010

Below are my top ten stock picks (listed alphabetically by company name) followed by honorable mentions and also several ETFs to keep an eye on. Prices are as of close on December 31st, 2010.
AMRC-Ameresco
Start: $14.36

Why: Ameresco went public in October of 2010 and is up only about 10% since that first day of trading. I stumbled upon this company the other day and am glad that I did. The company has a market cap of around $650 million, making it the smallest of my top ten stock picks. The company makes buildings more energy efficient, with major contracts from governments and schools. The company trades at a price divided by sales of 1 and is also trading below enterprise value right now. This is a great green play and as the company is a small cap it has plenty of room to run this year and in the future.
BAC-Bank of America
Start: $13.34

Why: The financial market is still on the upswing from its lowest levels. Bank of America trades close to its 52 week low at year end. The company still trades below book value and enterprise value. Bank of America scared investors off with its rumored Wikileaks target. Look for the larger banks to buyout smaller banks in 2011. Look for the bigger banks like Bank of America and Citigroup to continue to get past their debt problems and strengthen their balance sheets.
CNH-Case New Holland
Start: $47.74

Why: The Case and New Holland brands are great brands in the agricultural and construction industries. The company also owns the Kobelco and Steyr brands. The company always plays third wheel to John Deere and Caterpillar. Fiat owns 89% of the Case New Holland company. If Fiat decides to split off the company or sell part of its stake the company becomes a huge takeout target. The stock should rise to $60 by the year end as it is currently trading at 1.5x book and less than 1.0 price divided by sales.
CSCO-Cisco
Start: $20.23

Why: Cisco is an absolute value play here at these levels. Cisco continues to buy out rivals and expand into new industries. The company is involved in several technology industries and is involved in the Cloud technology that will dominate the talk of 2011. The company has been buying back shares and announced it will begin paying a dividend in 2011. At these levels I have to recommend the stock and think it should hit $28 to $30 by the end of the year.
GLW-Corning
Start: $19.32

Why: Corning makes glass components used in everything from televisions, laptops, phones, and tablets. The company continues to expand and be used by more and more large technology companies. The company originally was dependant on television sales throughout the world but now with its Gorilla Glass technology (glass which is scratch resistance) it continues to expand rapidly throughout the tablet and mobile phone industry. Shares are trading at 10x 2011 earnings and the company pays a dividend of around 1% as well.
DWA-Dreamworks Animation
Start: $29.47

Why: Dreamworks had a good 2010 with the releases of Megamind, Shrek 4, and How to Train Your Dragon. These movies did not perform as well at the box office as investors had hoped for and the stock got punished pushing it down close to its 52 week low to end the year. The company trades with no debt and at about 13x 2011 earnings. The company will release Kung Fu Panda 2 and The Guardians in 2011. The Guardians deals with Santa, the Easter Bunny, the Tooth Fairy, and Sandman fighting together against the Boogeyman while Kung Fu Panda 2 is the sequel to a movie that made over $630 million worldwide at the box office. The company continues to expand its relationship licensing its characters out to companies and also has been expanding its television presence as well. The company releases five movies every two years. Look to buy under $30.
EMC-EMC Corporation
Start: $22.90
Why: EMC competes in the high growth highly competitive network storage industry. As internet traffic increases this is a company that will benefit. The company also has a great presence in the Cloud industry which is a leading topic of 2011 investing. EMC owns 80% of VMWare as well. In network storage EMC competes with Dell, IBM, and Hewlett Packard. The company trades at cheap levels on its own and investors are getting the stake in VMWare for next to nothing. Technology remains a place to be for 2011 and this is my favorite tech play for the year.
HGG-hhgregg inc.
Start: $20.95

Why: hhgregg is a consumer electronics specialty store. The store sells large ticket items like televisions and washers and dryers. These large ticket items are not likely purchases from internet and items that customers like seeing in person. Most items are offered with same day delivery. The company currently has 131 stores in 11 states. The 2011 plans are to open 40 to 45 stores. Net sales and profit have continually rose for this company and should continue to rise as the company expands its presence into other states. Investors will take note as this company could replace the vacancy left by Circuit City and start to take market share away from Best Buy.

PSMT-Pricesmart
Start: $38.03

Why: Pricesmart is the Costco/Sam’s Club of the emerging market world. The company has 28 locations in Central and Latin America represented by 11 countries, with plans to open a 29th in Columbia in 2011. The 30th location will also open in the Dominican Republic, which will be its fifth in the country. The company continues to beat analysts expectations every quarter and with same store sales reports every month. Analysts continually raise earnings estimates and the shares are already headed higher at the end of 2010. Pricesmart was founded by Sol Price who already sold a business to Costco. Part of their sale agreement was that he would not open another warehouse company in the United States, so instead he is in the growing Latin American market. This company could also be a buyout target by Costco or Wal Mart at some point down the road.

SIRI-Sirius XM Radio
Start: $1.63

Why: It’s hard to recommend a stock that traded at its 52 week high at the end of the year normally. However, when the stock has everything going for it, like Sirius does, it doesn’t seem like such a bad idea. Sirius just resigned a contract with Howard Stern, which this time around includes a mobile deal. The company also signed a deal with the NFL. These two contracts were the biggest things weighing the stock down in my opinion. The subscription numbers and automobile industry have already proved positive for the company. The company is starting to pay off debt and doesn’t seem to have any future problems with payments, as it has had in past. This company has risen from the brink of bankruptcy to future star. The company does have competition from Pandora, Ipods, and other listening devices but should continue to beat them and gain subscribers based on their offerings of talk radio, comedy, and sports that others can’t offer. I own shares of Sirius and continue to recommend them and would be happy to keep accumulating shares under $1.75.
Honorable Mentions:

BA-Boeing $65.26
Stock has been beaten down to Dreamliner delays. Look for a 2011 rebound back to $75

COH-Coach $55.31
Coach continues to open new stores and expand its presence into China.
DISCA-Discovery Communications $41.70
Discovery own Animal Planet, Discovery Channel, TLC, and the new OWN channel. This would be a play on the creation of the Oprah Winfrey Network which should have strong viewership from women and be a great way for the company to increase its advertising revenue.

FO-Fortune Brands $60.25
Fortune is splitting its company and I would wait to buy until after this. Its spirit division headed by Jim Beam will be a great target for Diageo or someone else to acquire as Jim Beam and Jack Daniels are the top two whiskeys.

LPSN-Liveperson $11.30
Liveperson provides web support to major retailers and companies on their websites. A rival was bought out this past year by Oracle.
MSG-Madison Square Garden $25.78
The company owns New York Knicks, New York Rangers, New York Liberty, and the famous Madison Square Garden. The New York Knicks are playing well this year and could make the playoffs and also could acquire Carmello Anthony which would bring in ticket sales and merchandise sales not currently seen.
SMT-Smart Technologies $9.44
Stock is near a 52 week low. Company sells interactive whiteboards which should increase use in classrooms and offices.
These stocks that were picked are the opinions of the author. Please do your own investment research before investing in them. Good luck in 2011.