|Written by GSCR Staff|
|Tuesday, 21 October 2014 06:11|
We hope for everyone’s sake that this week is not as ‘adventuresome’ as last week.
The week has started off in the green, so we thought we would take a look back at an old pick.
Glu Mobile, Inc. (NASDAQ – GLUU - $4.43) is a Market Monitor pick from May of 2013. The stock is currently sitting at a 60% gain in stock price since our first article. The stock was actually up over $7.00 earlier this year and has settled back down to the current level over the last few months.
The Company develops games for smartphones and tablets that include Big Time Gangsta, Blood & Glory, Contract Killer, Contract Killer Zombies, Deer Hunter, Eternity Warriors, Frontline Commando, Gun Bros, Heroes of Destiny, and Motocross Meltdown, Samurai vs. Zombies Defense, and Stardom, as well as third-party licensed brands. The Company’s just released the new version for its flagship Facebook game, Kim Kardashian: Hollywood a few weeks ago. This game has been wildly successful.
The valuation looks very positive for GLUU. A forward P/E of 19 indicates a big upside in revenue growth in 2015 with analysts’ estimates over 12% increase in the metric. On the margin side, the profitability metric of gross margin of 70% versus the industry average of 58% also illustrates healthy sales to costs relationship. Finally, a short float ratio of 3.5% is a sign of the overall positive sentiment for the stock going forward.
We say hang on to this one for a while. GLUU should reach the $5.00 level again by the end of the year.
Have a great day!
Disclosure: Goldman Small Cap Research analysts are neither long nor short these shares but may elect to purchase the stock within the next 48 hours.
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