Electronics Boutique

[Sharky]

Anyone else like the look of this stock, currently at about 61p mid price. It's been in a gentle uptrend since April of last year, touching 70p a couple of times in the last six months, it now seems to be sitting on its support trend line and has started a new short term uptrend, looks like it could really test the 70p resistance. Considering the current market conditions, it appears to have weathered it well. Perhaps this is to do with the release of the Playstation 2 and the new Microsoft X-Box and Nintendo Game Cube and GameBoy Advanced consoles due out over the coming months.

Any thoughts would be welcome.

Sharky.

 

[darth trader]

Hi Sharky.
Nice to see you making a non-technical post for a change.

This one doesn't appeal to me at the moment. There is a long way to go before it breaks that resistance you mentioned. In terms of trend it still has to break out of the downtrend that's been in place since January and my favorite NVI suggests that the smart money has been selling on the quiet days.

Keep an eye on it though - when the market turns anything could happen.

FYI. I've been looking at SUF recently and it's not far off an all time high. That one looks really overbought though and more likely for the bottom to drop out of it soon.

 

[Uncle]

Hmmmm.....dont see much mileage in this one for the time being as it has been trending downwards since the 23/1, currently in the middle of the BB's 55.41/64.79, and therefore till we see some positive breakthrough, i would watch from the sidelines.

John

 

[Max Damage]

In the games sector there will be far more money to be made on the developers and publishers who are completely bombed out.

Look at the only stocks up on the NASDAQ the last 52 weeks

ERTS, ATVI, THQ. All publishers all on PE over 20 and all in the US where the reason given by analysts is this sector is about to boil very hot. Poor old UK is well behind the curve on this one, but that helps the canny investor. Maybe a little more bad news in the short term but a 30% forcast industry growth rate per year for the next 5 years is not small with the smaller companies having the potential on a couple of big sellers to substantially rise in value.

Remember Eidos 60 mill company when I bought. They had a hit with Tomb Raider. They rose to a 1billlion company on the PSX1 wave. More companies can do that again but many are starting from sub 20million and the potential is now greater than then. PSX 2 is one console. But there is mobile gaming coming along and after erm erm Pornography computer games are the second largest use on the internet. Enter broadband in 5 years and bang games can be ported down the line to any house in the world.

The sectors future is worth research time of anybodies I assure you

 

[Sharky]

Thanks Max, Uncle and Darth.. appreciate your feedback. In the interests of research I've attached a chart of EBQ (Electronic's Boutique) and created a poll.. here -> http://www.trade2win.co.uk/bb/showthread.php?threadid=2941

Enjoy!

Cheers,
Sharky.

ps. Looking forward to more feedback.

 

[Max Damage]

A bit more info on the sector

Interesting to note that game sales (in the UK) last week were 48% higher (in value, not units) than last year.

Also interesting to note that there is no correlation between the cycles of the game industry and economic cycles. In fact, during the last economic recession the games industry underwent massive growth.

Also interesting to note that we are at the beginning of a five year upswing in the game industry. PSOne sales continuing strongly, PS2 game sales now fighting for the top spot, Gameboy Advance just launched in Japan and coming to Europe/US this Summer, Xbox being launched with $500m marketing spend this year and Gamecube also being launched this year.

Not all companies will be winners so choose carefully. But the ones that do emerge as winners are going to grow massively. And looking at the bombed out prices of almost all game stocks in the UK (with the exception of EBQ) then those who pick wisely are going to make massive, massive gains.

 

[RogerM]

Best chart signal for this was the saucer bottom this time last year - plenty of chance to get in between 30 and 40p - not me though. I just sat and watched it! I'm expectig a trading range between 56 and 66 to continue for a while with resistance at 70. If it can break thru 70 then may be a goer up to resistance (old support) at 90.

 

[darth trader]

unconfirmed ascending triangle

Sharky,

just thought that I'd mention that my new toy Chart Pattern Recognition is flagging this as an unconfirmed ascending triangle.

It seems to have decreasing volume and and is approaching the critical 60-75% point where a breakout will occur if it is going to.

I will be watching this for signs of a breakout. May be it's not a dog after all?

 

[Sharky]

An Update

Hi everyone,

I've been following EBQ since last week and she's made steady progress each day, and is now sitting just below resistance at 68.25/69. Now I think it's quite important to keep an eye, to see whether there will be a breakout from 70p. Despite lots of smaller sells the past few days the price hasn't retreated and today there were quite a few larger block buys, with volume steadly increasing the past few days (though not substantially). Agree with darth trader observation of the ascending triangle, so if a breakout will occur now's as good a time as any. And with the Results due out next wednesday, this looks like a crucial time, and one possible worth continuing to keep an eye on.

Plus here's another chart for your viewing pleasure....

 

[ChartMan]

I'm not convinced it'a an ascending triangle, but each to their own interpretation.General observations apart from that are correct, especially the increase in volume over the last few days, which is essential to sustaining a rising trend.However, beware the Top doji today, which can indicate a reversal.( See the previous ones arrowed). RSI,TCI and CCI are both very strong and with the volume, we could see the breakout.Be careful though, it could just as easy drop.......

 

[darth trader]

Martin,

that's the great the thing about TA and the value of a board like this.

Generally speaking we seem to have the best rally since the beginning of the year when the fed cut insterest rates between meetings.

There are many charts with stocks moving into oversold positions poised to rally or fall depending on what the bears do next.

I watching the market with interest and have entered some postions on old economy stocks.

 

[Sharky]

Update

Good results came out today, and we finally passed the 70p barrier. The following article was published today on Sharecast site:-

Electronics Boutique ready to make a play

By Laura Cummings
Wed 25 Apr 2001


Computer games retailer Electronic Boutique is looking to buy and has the cash to do it. Its shares rose rose 5p or 7.5% to 74.5p this morning after full-year figures showed a strong balance sheet.

The group, Europe’s largest pure games retailer, today beat analysts' 2000 profit expectations. It said it would be looking at targets for acquisitions within the next 12 months. Its net cash balance in the year to January 31 rose from £3m to £16m.

EB controls 30% of the UK games market and reversed its fortunes in 2000 after tough competition from rival sellers in 1999. Pre-tax profits for the year were up 182% to £7.8m, against £2.8m the year before, on turnover up 22% to £307.1m. Margins were also recovered, up from 30.8% to 32.7%.

EB’s recent like-for-like sales prove last year’s turnaround is continuing. In the first 12 weeks of the current year they were up 18%, accelerating to 31% since 18 March.

The company insists that the much-hyped PlayStation2 was “certainly not the be all and end all” of its business, representing only around 6% of last year’s turnover. However, EB and analysts’ optimistic outlook is being bolstered by the launch of a number of new games and consoles in the next two years, including Game Boy Advance this summer and Microsoft X Box in Spring 2002.

Isabelle Payet at Credit Lyonnais has a buy recommendation on the shares up to 100p and says she expects the company to be one of strongest performers in the current year.

While the group is diversifying into internet sales and online gaming – it bought BarrysWorld gaming group in February this year - deputy chairman Martin Long believes EB is still essentially a “bricks and mortar business”. He said the group, which bought rival Game in 1999, was poised to grow organically and through acquisition, adding: “We’ve now generated cash. This is the sort of year we would start to look at acquisitions.”

EB opened five new standalone stores last year and said this would increase to between 15 and 25 outlets this year. With its improved net cash balance, the group has the funds for it. Analysts have also suggested that the group was interested in acquiring rival Gameplay. Gameplay's market value has slumped from £300m to £18m in the past year.

EB is increasing its final dividend 10% to 0.33p. At this morning's price of 74.5p per share the group has a market value of £240m.

 

[ChartMan]

Nice earner! closed at 77 ish.Makes up for the oops! on SRP

 

[Sharky]

Happy Ending..

Well, just to keep you all up to date. I bought at 62.5p and sold at 82.5 on Friday afternoon, for a nice 33% profit. I've attached the latest graph, and as you can see it brokeout convincingly after the results all the way up to the upper resistance line of the channel its formed over the last year. Perhaps a gamble, but it's paid off.. and I'd like to thank everyone for there contributions. I think each of us deserves a pat on the back for our occasional successes!

And with the relaunch of T2W next month, expect some great new features which I hope will encourage all members to pool their resources in targeting particular shares that may prove to make a tidy profit.

Cheers,

Sharky.

 

[darth trader]

Well done Sharky.

33% is a nice profit and as always it's best to take what the market gives.

Your timing might be perfect the American market are coming off their highs this evening though I have a target of 100p based on a breakout from an ascending triangle.

I will look forward to the new features on t2w that you mentioned.

 

[Sharky]

Thanks Darth,

I also think EBQ has some more mileage in it, notice the the increase in volume accompanying the breakout. And 100 is also the target I've got.

Certainly one to continue to keep an eye on.

Sharky.