Do It Yourself Stock Investor

Saturday Night RORC: Glu Mobile

by DISYI
April 23, 2016

Glu Mobile Inc. (NASDAQ: GLUU) creates mobile app games for smartphones and other mobile devices. Recent improvements now include the compatibility of virtual reality/VR headsets.

Glu Mobile Chart via FinViz for a RORC stock analysis

Glu Mobile is popularly known by media outlets for celebrity themed games: Kim Kardashian, Katy Perry, Taylor Swift, to name a few. Customers have also been drawn to their action/sport series such as Deer Hunter and Tap Sports Football.

Their sector is conventionally defined to include other video game makers when analyzed, but it has received alternative assessments. See the recent Glu Mobile, buy-side analysis "A Virtual Reality Taylor Swift Would Be A GLUU Dream Come True" for further.

In a Business Insider interview, Jeff Bezos laid out the counterintuitive market for e-books. This was in response to complaints of driving down e-book pricing. As he explained, e-book pricing had to be competitive with not only print, but also with apps, mobile gaming, which compete for the same consumer dollar. Essentially, the old pop adage of, "why read a book when I can watch the movie," had been replaced to include app/game.

Most of the publicly traded publishers are not listing research and development (R&D) as an expenditure.

That said, the Return on Research Capital (RORC) comparison chart shows Glu Mobile, Inc. among a non-conventional sector of companies. Activision Blizzard, Inc. (NASDAQ: ATVI) is primarily a PC/console game producer. They make the popular World of Warcraft, aka, WOW. Activision recently bought game app producer, King Digital Entertainment (NYSE: KING), known for their game Candy Crush.

Pandora Media, Inc. (NYSE: P) continuously has their app placed in the top charts for free Android downloads. The top paid Android app/game is Minecraft, which was bought by Microsoft Corporation (NASDAQ: MSFT) in 2014. Fiscal year is offsetting, ending in June.

Saturday Night RORC: Glu Mobile

For every dollar of R&D spent by Glu Mobile in 2014 they made $3.43 in gross revenue for 2015. Activision Blizzard, Inc. and Microsoft Corp. more than doubled this output and Pandora Media, Inc. had the greatest margin of $13.76 per dollar spent.

*****

Disclosure: I am/we are long GLUU.

StockTwits