GuruFocus Premium Membership

Serving Intelligent Investors since 2004. Only 96 cents a day.

Free Trial

Free 7-day Trial
All Articles and Columns »

These 2 Companies Are Looking to Deliver Growth Beyond Apple

August 12, 2014 | About:
jaggom

jaggom

0 followers

Glu Mobile (GLUU) and GT Advanced Technologies (GTAT) are two companies that are looking to diversify their businesses beyond Apple. While Glu is making games for platforms beyond iOS, GT is moving into new markets such as solar and LEDs. Let's take a closer look at their prospects.

Glu's moves

Glu plans to use new shelf filing equally prudently and judiciously with the continued sharp focus on accretion and downside protection for any acquisition it makes. Deals such as the PlayFirst acquisition, as well as its transactions to acquire the Deer Hunter IP, Seattle and Toronto studios and games by technologies have all added tremendous enterprise value to the company.

2014 is proving to be the biggest and most profitable year in Glu’s history. Further, 2015 is believed to be considerably and optimistically bigger with the next installment of the Deer Hunter franchise as well as with the launch of James Bond title.

At present, Glu has excellent monetization, user acquisition; unexpected retention and core game play development all institutionally stronger than ever. Both the 2015 Deer Hunter and 007 games are believed to possess uniquely strong name recognition and differentiated core game play.

Eternity Warriors 2 and Eternity Warriors 3 have demonstrated that Glu is delivering on the game business service gas strategy promised last year. Several more titles with the longer tails, ongoing live updates and social competitive features that have carried Deer Hunter 2014 and Eternity Warriors 3 to success are expected to show up by the end of the year.

Going forward, there’s a very bright outlook for Glu. There’s a strong release slate for the second half of the year that includes several of its top franchises, Contract Killer 3, a followup to the Frontline Commando D-Day franchise and a reboot to our Blood and Glory IP. Dino Hunter Deadly Shores, a new title off the Deer Hunter engine, takes hunting to exotic new locations with extreme new weaponry.

With the mobile gaming industry gaining maturity, Glu’s revenue will increasingly be driven by its largest and most successful titles.

Glu is primarily focusing on investing in infrastructure for this year. It has some ambitious tools in infrastructure road map for 2014 and believes to be investing in the right technology to drive growth in its business.

What about GT Advanced?

GT doesn’t want to restrict itself as a sapphire supplier to just Apple, but it is aiming at becoming an exceptional and unparalleled world class supplier of sapphire material and equipment for other major players in the market.

As GT entered into the sapphire materials business, it opened doors for other potential material segments of the company. GT has been investing hard from several years in LED, power electronics, advanced solar, and industrial markets, with such movement by GT these investments and other initiatives are expected to reap good harvest over the next 18 months.

GT also has many new products in its pipeline. GT is on track with its commercialization strategy for its Hyperion technology, silicon carbide HVPE, PVB, HiCz and new polysilicon products. With these new products GT is expecting further growth in the revenue and as these products see growth in demand the company is expecting meaningful revenue from them in early 2015.

Apart from providing sapphire growth solutions for the LED sector, GT is also counting on HVPE and PVD sectors. Moreover, the prices of LED appliances are expected to increase as ASF customers are running at high utilization rates. This fact provides a bright opportunity for GT to lead its revenue growth further in the future.

Demand from new applications outside of the LED sector are also adding volume and impacting supply-demand dynamics in the industry in a positive way. Tier 1 solar companies are posting positive margins, and there is potential for fresh capital investment.

Also, end-market demand has also picked up due to a drop in prices. Demand is forecasted to grow to 49GW in 2014 from 36GW in 2013. With these amazing projections and the positive financial performance of some of the key players in the solar industry, the photovoltaic sector is showing signs of improvement, and this is a tailwind for GT going forward.

Conclusion

Both companies look well-positioned for the future. Hence, investors would do well to buy shares of these two companies as they can get better in the future on the back of their diversity moves, making them impressive investments.


Rating: 0.0/5 (0 votes)

Comments

Please leave your comment:


Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK