Video game stock to get you through a lackluster market

As talk of an ensuing recession looms over markets, investors may be looking for industries and stocks that could withstand a downturn. The answer to these problems may lie in the stocks of video game companies.

The video game industry experienced double-digit growth during the downturns of 2001, 2008, and 2009. Consumers seem to flock to video games during recessions because they are a cheaper form of entertainment.

Among video game stocks, tech giant Sony (NYSE:SONY) stands out as the largest video game console company and largest video game publisher. At the same time, the company also recently received a Upgrade by Macquarie’s Damian Thong on Friday, July 8.

Moreover, in their last Press releasethe company reported a 1.2% year-on-year (YoY) increase in net revenue to 2.264 billion yen (~$16.46 billion), with earnings per share (EPS) topping expectations at ¥88.98 (~$0.65).

Additionally, the company raised its full-year forecast, expecting sales to rise to 11.4 trillion yen (~82.8 billion) from previous expectations of 9.9 trillion yen. (~$71.9 billion).

Chart and Analysis SONY

Notably, year-to-date (YTD) stocks are down more than 34%, potentially providing a solid entry for long-term investors, despite the negative trend for SONY.

Prices have been consolidating lately and volatility has been reduced with a support line formed at $81.68, while the resistance line settled at $82.74.

SONY 20-50-200 SMA line chart. Source. data. See more shares here.

Comparatively, analysts are pricing the stock as a moderate buy, predicting the average price the stock could reach over the next 12 months is $125, 52.05% higher than the current price of $82.21, as they also see more room to maneuver in this lackluster market.

Wall Street analyst price targets for SONY. Source: TipRanks

Finally, the gaming industry has seen a number of mergers and acquisitions (M&A) which should further consolidate the sector. Consolidation should increase barriers to entry, perhaps giving larger companies a better competitive moat.

Investors looking for market niches that can emerge stronger from a potential recession may consider attractive margins and growth as the alpha and omega of their investment criteria.

Buy stocks now with Interactive Brokers – the most advanced investing platform

Disclaimer: The content of this site should not be considered investment advice. The investment is speculative. When you invest, your capital is at risk.

About Jason Zeitler

Check Also

Conan O’Brien resurrects his Clueless Gamer series on YouTube

We haven’t seen the last of Conan O’Brien trying to play the newest video games …