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ELECTRONIC ARTS, INC. long position. The fund’s strategy is Seasonality. The fund analyses all the listed companies on NASDAQ and NYSE. The fund then uses the Seasonality strategy by looking at the performance of the stock in the historical monthly average return and picks the top performing stocks that are then equally weighted. Ranked 3 in the analysis made 3.11.2020 for short positions.
In the time of social distancing, consumers are bound to spend more time gaming. We at RonaFund feel that gaming has great potential. EA also has just released new versions of its sports game franchises, which should help it see its profits increase for rest of Q4/2020.
We are executing our intended investment strategy by buying the needed amount of this stock. The weight of this stock in our portfolio is 5%. Our investment philosophy is passive buy-and-hold strategy consisting of gaming industry stocks.
EA, long position. The IJ Fund aims to build a low-beta portfolio, composed of undervalued stocks. Over the past year, Electronic Arts has reported a net income of almost $2Bn. That is 6% of its market cap, or a market multiple of 20x. Comparing this to the S&P 500, with the respective multiple at above 25x, the IJ Fund concludes that EA is potentially undervalued. The company has a beta of 0.9, which is slightly above the fund target beta. The market capitalization is $35Bn.The company industry classifies as Technology.
Our investment strategy is passive investing. The portfolio follows Nasdaq 100 index, choosing stocks with highest EPS ratios and low price-to-book ratios compared to stocks with similar EPS ratio. This stock offers relatively high returns with low P/B ratio. The initial positions are equally weighted so $100k is allocated to this stock.