Top three GameStop stock’s alternatives

February 07, 2021 01:18 PM PST | By Kunal Sawhney

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Summary

Zynga is one of the most popular video games publishers in the US, having zero debt.

Nintendo is another rival of GameStop which has recently come out with its best quarter since 2008.

Scientific Games which provides gaming products could also be looked upon as an alternative to GameStop.

The GameStop (NYSE:GME) mania was one of the most hyped short squeeze events in the US. However, the buying frenzy seems to be running out of steam. GameStop's overboard buying has also turned investors to some other alternatives that probably don’t need a short squeeze to rise.

As most investors have a long-term vision, it is better to stick to a fundamentally strong company rather than following the herd. Unless you are a day trader, trying to punish the hedge funds again, there are far more stable stocks to capitalize on the gaming industry.

Zynga Inc. (NASDAQ:ZNGA)

Zynga is one of the most popular video games publishers in the US, having world-famous titles like Mafia Wars and Farmville on Facebook. The company has been doing pretty well over the last few years as it is shifting its focus to capture the mobile market.

The company releases numerous content updates for its games for a few years, which effectively enhances the life cycle of its games. The company has zero debt in its balance sheet, giving it more financial flexibility for future prospects.

Nintendo Co. (OTC:NTDOY)

Nintendo recently came out with its best quarter since 2008. The company posted an operating profit of US$2.2 for the quarter ended 31 December 2020. Nintendo now expects a full-year sale of 26.5 million units and has notched up its operating profit forecast by 24 per cent.

The company has witnessed a surge in demand during the pandemic, which also shows its gadget’s popularity, especially the customized limited editions. The company’s flagship product, Switch has turned from a gaming console to a lifestyle product.

Scientific Games Corp (NASDAQ:SGMS)

Scientific Games provides gaming products and systems, having a market of US$4.49 billion. The firm has diversified gaming products in the portfolio and also includes wagering systems and server-based gaming machines. On Friday, the company’s share price jumped 3.67 per cent and closed near the 52-week high of US$48.22.

The company is based out of Las Vegas and employs over 9,800 employees.

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