Zynga Inc (ZNGA)

[Trevor11]

ZNGA: ...BREAK OUT OF SINGLE DIGITS, GROWING CATALOG,OF,HITS,TEMPTING,TO,POTENTIAL,BUYER









3 GREAT STOCKS UNDER $10
Sirius XM Radio,
ZYNGA, and Extreme Networks have what it takes to BREAK OUT OF THE SINGLE DIGITS.


RICK MUNARRIZ
(TMFBREAKERRICK)
AUG 31, 2016 AT 3:07PM



IF YOU'VE GOT $10, I HAVE SOME STOCK IDEAS FOR YOU.
I'VE BEEN HIGHLIGHTING ATTRACTIVE OPPORTUNITIES IN LOW-PRICED STOCKS SINCE MY ORIGINAL "5 STOCKS UNDER $10" COLUMN 15 YEARS AGO, way before the practice became cool.

I'VE SEEN PLENTY OF STOCKS WITH POCKET-CHANGE PRICES GENERATE INCREDIBLE GAINS.
I've also seen many, if not most of them, come undone. The risks are substantial on this turf. There are usually good reasons for a stock to be ignored or beaten down. However, A MARKET RALLY CAN WORK WONDERS FOR THE UNLOVED WITH POSITIVE CATALYSTS IN THEIR POCKETS.

LET'S GO OVER MY FIVE PICKS FROM MARCH 2009 -- WHEN LOW-PRICED STOCKS BOTTOMED OUT -- TO PROVE MY POINT.

 
 COMPANY	                  AUG. 30, 2016	                  MARCH 13, 2009	GAIN 
 SIRIUS XM RADIO (NASDAQ:SIRI)     $4.16	                    $0.198	       2,001% 
 BARE ESCENTUALS*	         $18.20	                     $3.66	         397% 
 FOCUS MEDIA*	                 $27.50	                     $5.74	         379% 
 GERON	                          $2.69	                     $4.36	        (38%) 
 FORD	                         $12.55	                     $2.19	         473% 
 

*BARE ESCENTUALS WAS ACQUIRED FOR $18.20 PER SHARE IN 2010. Focus Media was acquired for $27.50 per share in 2013.

THE AVERAGE GAIN OF 642% IN A LITTLE MORE THAN SEVEN YEARS IS PRETTY REMARKABLE. Yes, that also happened to be WHEN THE MARKET WAS HITTING ROCK BOTTOM, but that still blows away every major market index in that time.




LET'S GO OVER SOME NEW POTENTIAL WINNERS AT SINGLE-DIGIT PRICES.


ZYNGA -- $2.76
Zynga (NASDAQ:ZNGA), the original darling of social gaming, has fallen on hard times. The publisher of FarmVille, Mafia Wars, and Words With Friends is in a funk as revenue, bookings, and player metrics are all edging lower. Its guidance for the current quarter calls for more of the same.
Video gamers are fickle, and the lifeline for hot mobile games is even shorter. Zynga is at the mercy of continuing to CRANK OUT HITS -- LIKE CSR RACING 2 THIS SUMMER -- only to have something ready to go when popularity starts to wane a few weeks later. An EMPHASIS ON VIRTUAL CASINO GAMES IS PROVIDING STEADIER PRODUCTIVITY.
Its two biggest games during the second quarter -- ZYNGA POKER AND WIZARD OF OZ SLOTS -- ACCOUNTED FOR MORE THAN A THIRD OF ITS ONLINE GAME REVENUE.

THERE ARE A FEW GOOD REASONS TO WARM UP TO ZYNGA. FOR STARTERS, IT'S NOT GOING AWAY ANYTIME SOON. MORE THAN A THIRD OF ITS MARKET CAP IS BACKED BY THE $868.4 MILLION IN CASH AND INVESTMENTS ON ITS DEBT-FREE BALANCE SHEET AS OF THE END OF JUNE. That gives it the resources to keep swinging for the fences, and it also makes the stock even cheaper than the low stock price seems to suggest.

There's also industry consolidation. Candy Crush Saga parent King Digital and Clash of Clans publisher Supercell have been bought out at decent premium over the past year. may need A MONSTER HIT at that level to SMOKE OUT A RICH EXIT, BUT ITS GROWING CATALOG OF HITS AND FORMER HITS HAS TO BE TEMPTING TO A POTENTIAL BUYER if its enterprise value stays around the current $1.5 billion for too much longer.



Source:

www.fool.com/investing/general/2016/08/31/3-great-stocks-under-10-2.aspx?source=yahoo-2&utm_campaign=article&utm_medium=feed&utm_source=yahoo-2