On December 24, 2012, Activision Blizzard (ATVI) was among the top three stocks on our Nasdaq 100 Watch List (found here). At the time, we said the following:
“Activision Blizzard (ATVI) was on the watch list on August 12, 2011 (found here) when the stock was trading at $10.71. No sooner than ATVI was on our list that it rose +30% to the November 8, 2011 high. ATVI is now selling at the same price as August 2011, however, the stock has a lower P/E ratio and a lower P/B ratio. If we suppose that the stock has not moved up at all in the last year, this could be considered an undervalued stock.”
Activision is up over +39% in only 5 months. With such excessive gains in such a short period of time, it is necessary to consider selling the stock. For investors who want to take advantage of any additional upside potential, selling only the principal is an acceptable alternative.
