Why Bank of America (BAC) is My Favorite Bank Stock

Bank of America (BAC) is my favorite bank stock right now, and its future looks a lot brighter. The share price could double from here.

Bank of America has underperformed for a number of years in an already-shaky banking sector, with added uncertainty regarding interest rates, economic growth, lending, income generation, and regulation. But the worst is now likely behind BofA (BAC), and investors could begin to warm up to and even chase the stock due to very attractive and deeply-discounted valuations, strong cash flows, a growing dividend, increasing earnings, peer outperformance, and an improving overall environment.

After collapsing during the financial crisis of the Great Recession (2007-2009), Bank of America (BAC) has been stagnant during the economic recovery which followed. Though the stock bottomed in early 2009 and again in late 2011, it has done almost nothing for three years since 2013.

Bank of America (BAC) has underperformed the broad Financials sector (XLF).

BAC is significantly lagging Since the 2007 peak:

BAC is significantly lagging since the the beginning of 2010, with a negative return while Financials (XLF) as a whole are up big:

Now is the time to BUY Bank of America (BAC), and here's why:

VALUATIONS
Bank of America is trading at very attractive valuations, selling at a deep discount likely due to overblown fears. 

The stock is currently trading at a Price-to-Earnings ratio (P/E) of 10 and a forward P/E of 8. Moreover, the P/E ratio has dropped considerably to a low not seen since 2012:

Furthermore, the stock is selling at nearly HALF its Book Value (P/B) and even below its Tangible Book Value (P/TB):

Most Bank stocks have been selling at discounts to Book Value or close because of all of the fear surrounding the sector. But with much of the Financial Crisis and potential hurdles behind us, buying BAC at around half of BV is a steal.


FINANCIAL STRENGTH
Bank of America is fairly solid financially and in many ways stronger now than it was before the Great Recession. 

BAC's liquidity and ability to withstand a slowdown is visible in its Cash Ratio and Quick Ratio:

BAC's Total Current Assets and Total Assets are bigger than Total Current Liabilities and Total Liabilities, and Total Deposits have been growing:

BAC also has a greater ability to cover its Debts, visible in its much lower Debt-to-Equity (Debt/Equity) and Debt-to-Assets (Debt/Assets) ratios:

Add to that a decreased Beta, which signals a decreased volatility compared with the past 5 years:

PROFITABILITY
Bank of America has improved on both its Earnings and its Margins. 

It has been able to grow its Earnings Per Share (EPS):

Margins (Profit Margin & Operating Margin) are positive and also improving:

Net Income (NI) is positive and has been on the rise:

Net Income (NI) by business segment:

CASH FLOWS

Bank of America's cash flows are pointing to a safer, more liquid, and growing company. Usually considered one of the most important determinants of a financially-strong company (or, in the opposite case, an accounting "red flag"), Cash Flow for BAC is mostly a positive factor. 

Free Cash Flow (FCF) is positive. Though it has been volatile, it still looks good:

BAC's Operating Cash Flow (CFO) is positive. Another major "red flag" in the case of negative CFO, Bank of America still has the "green light" because its CFO is positive.

BAC's Cash Flows from Operations (CFO), Investing (CFI), and Financing (CFF). Financing has turned negative, but overall Cash Flows are acceptable.

Cash Flows are important because they can indicate a company's ability and liquidity to weather a slowdown or cover its debts, as seen in BAC's Cash Flow from Operations (CFO) to Current Liabilities ratio:

DIVIDEND

Another good reason to own BAC is the Dividend that pays investors an income stream while they wait. Even better, though the current 1.51% Dividend is still low, it has been growing:

Additionally, as Banks continue to strengthen and overcome the strict regulation which has limited their ability to raise dividends, BAC's dividend might approach its historical level of closer to 4 or 5%:

INSIDER BUYING

Insiders still own only a tiny piece of BAC stock, but their support has grown, as visible in the growing number of shares owned by insiders:

PEER COMPARISON

Bank of America is also attractive when compared to its competitors, not just on an absolute basis.

When compared to companies like Citigroup (C), JP Morgan (JPM), Wells Fargo (WFC), US Bancorp (USB), American Express (AXP) and Goldman Sachs (GS), Bank of America (BAC) has a very attractive P/E Ratio, PEG Ratio, P/S Ratio, and P/B Ratio. In fact, its Price-to-Book (P/B) ratio is the lowest of its major competitors, and far below most of them.

BAC has far more Cash and Short-Term Investments ($167 Billion) than all of its competitors except for JP Morgan:

BAC has strong Revenues and competitive Net Income when compared to the other banks:

BAC has strong liquidity and Free Cash Flow compared to its peers:

BAC has room to grow its Dividend:

Even with the attractive valuations, strong financials, improving business, etc., Bank of America (BAC) has still underperformed most of the Financials Sector over the past two years:

Surprisingly though, since the March 2009 bottom the worst performers have been Goldman Sachs (GS) and Warren Buffett's Berkshire Hathaway (BRK.B):

Bank of America (BAC) is, however, the 4th largest allocation within the Financials ETF (XLF):

TECHNICALS

Bank of America (BAC) has recently seen a sharp drop from ~$18 to $11, with a break below the critical $15 level. The $15 level dates back to 2013, so rising back above it could be difficult but is necessary for the continuation of the uptrend.

On the positive side, even with the overhead resistance, the Relative Strength Indicator (RSI) is trending up and even hinted at a bottom in February with a "positive divergence" in RSI while the stock price made new lows:

Furthermore, the Weekly chart looks excellent as the 50, 200, and 300-week Moving Averages are aligned properly and shorter-term momentum is leading. This Weekly chart will look even better, way better, if BAC can climb back above the 200-week MA.


















Perhaps the rolling 52-Week-Highs and Lows could signal upcoming trend as well:

It is a bit disconcerting that the 52-Week-Low (red line) was violated and is trending down, but if BAC could break back above the $18.48, 52-Week-High (orange line), there is A LOT of upside.

REPUTATION

Bank of America is still one of the biggest and most well-known banks, with a great reputation and plenty of awards. There is plenty of room for improvement, but the brand name is a huge plus. 

Nothing is guaranteed, but think about it this way: If there is another banking or financial crisis, which bank is the US Government most likely to save solely due to its name? 

It also helps to have a leading Wealth Management brand name like Merrill Lynch:

Bank of America (BAC) has been overlooked and its stock is set up for major upside.
It is selling at steep discounts; it sports attractive valuations; it has improved its financial strength substantially; it is profitable; it is growing; it has good cash flows; it has growing insider support; it has strong peer comparisons; it pays a dividend; it has a great brand name; and it has plenty of room to exceed expectations.
Bank of America (BAC) may be the best Bank stock to invest in, and it could double, triple, or more over the next years if it can continue to improve.


Includes: BAC, XLF, JPM, C, GS, USB, BRK.B, WFC, AIG

Gold: Avoid The Trap

Contrary to what most investors and gold buyers believe, the rally we've seen in Gold (GLD)($GOLD) in 2016 is just a counter-trend rally within a multi-year downtrend. Gold is only a few months removed from 6-year lows, and we haven't even truly seen panic and capitulation normally associated with a long-term bottom. Simply put, gold was due for a "bounce" or a "breather" before it can continue its decline. Don't get too excited!

Gold is in the midst of a major long-term bear market, ultimately headed to what I predicted in 2011: $700/oz.

Everyone has already seen the massive collapse which cut gold prices by nearly half, from the September 2011 high above $1900 to approximately $1050 by December 2015. Yet though gold has been performing very well so far in 2016 (already above $1250), it is inevitably doomed to resume the downtrend. My research strongly points to a further decline, including sharp drops and even price crashes as the "Gold Bubble" unwinds.

Though gold is, in our opinion, on its way to $700, it could not do so all at once. Trends and cycles do not exist in straight lines, and gold (like all other bear or bull markets) moves in fits and starts, switching on and off between sharp declines and counter-trend rallies. What matters most, however, is the long-term trend. And though gold bulls are convinced the worst for gold is now behind us, it is exactly this gold bounce or "false recovery" that tricks them into jumping back in right before the next plunge.

Gold could either reverse back to the downside right now or could continue to recover higher, but why buy gold when the upside is limited? If the bounce continues, gold has major resistance at $1300, $1400, $1550, $1600, and $1800; plus it is very unlikely that gold could even break above $1600 for many years to come.

Even if gold does continue higher, there are much better alternatives. Though many would like Gold to be considered a Currency, it has been trading like a Commodity. If commodities continue to recover from their major bear market, you'd be better off investing in Energy (USO)(UCO)(XLE)(UNG), Industrial Metals (AA)(X)(CLF), Coffee, Sugar, and even Platinum. The stock market doesn't look like a screaming buy, but even a simple Index Fund (SPY) could outperform Gold (GLD) going forward.

If you missed the bounce, move on.
This is not a new bull market, just a trap.
Gold is a lose-lose situation and a broken trend.
Don't double down, don't fall for it again, don't be a sucker.

Includes: GLD, GDX, GDXJ, ABX, NEM, GOLD, GG, USO, UCO, XLE, UNG, AA, X, CLF, JO, CAFE, SGG, SPY, DIA, QQQ, UUP

Coffee Prices Set To Rise

Relevant stocks:    $JO $CAFE $SBUX $DNKN $GMCR

Coffee prices have been devastated over the past 5 years, together with much of the overall commodity space, but it appears that a bottom may be in and prices could rise significantly. 

Coffee Prices, 5 year:

Commodity Prices (CRB Index), 5 year:

While Coffee commodity prices have plunged, companies such as Starbucks (SBUX) and Dunkin Donuts (DNKN) have benefitted from the much lower input costs.

Much of the decline in commodity prices has been likely due to a decrease in global demand as well as an overall threat of deflation. Though the threat of deflation, or at least an economic growth slowdown, is very real, the resulting drop in many commodity prices is at this point overdone. The declining prices may be warranted, but after such massive declines a bounce or recovery is needed. This could very well be a long-term bottom in many commodities; but even if it isn't, a "breather" is needed and prices could see a considerable increase. 

Zooming into a 1-year daily chart of Coffee, we can see a long, downward trend-channel:

Coffee prices have been stuck in a downtrend, tightly within a "channel". In order to break out into an uptrend, prices have to forcefully rise above $130. If Coffee prices "break out" above the $130 upper trendline, they could go much higher. 

Remember $2 Gas?

Enjoy the cheap $2 gasoline while you still can!

Due to the collapse in crude oil, gas prices have reached lows not seen since the depth of the Great Recession. But these extreme lows in oil and gas prices won't be here for long.

                                              Gas Prices

Crude oil and gasoline prices have moved largely in unison, both up and down:

Crude Oil vs. Gas

Oil prices are at lows not seen in years, decimated over the past 2 years and crashing by nearly 80 percent to $26/barrel since the ~$110/barrel highs in June 2014.

   Crude Oil Prices

Possible Reasons for the Bear Market in Oil & Commodities

1) Huge oversupply due to more effective drilling technology and domestic self-sufficiency.

2) Slowing economic growth around the world (Europe, China, Brazil, etc), leading to lower energy demand.

3) Deflation, where the prices of nearly all assets fall. Usually accompanied by economic recession and stronger US Dollar ($UUP).

4) Over-speculation in the Energy ($XLE) space, as is apparent by the exposure of energy companies in the Junk Bond market ($HYG) ($JNK).


What's Next?

The magnitude of oil's collapse was far greater than I had expected or even assumed possible. Though I clearly stated my expectations of oil dropping significantly due to the large deflationary forces and slowing global economic growth, I didn't think crude oil would fall by more than 50 percent. Oil was definitely not staying at $100/barrel, but $30/barrel? That's crazy cheap. 

Still, caution must be exercised, as a continued decline is not out of the question.
However, even though oil and energy can continue lower, the largest price drops are already behind us. Oil is a much better investment than most other assets because it has already been crushed, and the bad news is mostly or completely priced-in.

Oil is now "over-hated", as oil prices ($USO) and energy company valuations ($XLE) have been severely (and excessively) cut. Most investors are running away from Energy or are still too afraid to get in.

Contrary to most investors, oil and energy is a major bargain right here.
Now is the time to look at Energy investments.
Now is the time to pick up the scraps left in the wake of oil's collapse. 

There are definitely troubling times and even bankruptcies for some of the energy companies ($CHK, $UPL $LINN, etc.), but it's time to search for the viable companies selling for dirt cheap.
Even if some of your Energy investments get wiped out, some of these companies are golden opportunities for exponential returns (think 300-1000%+).

The outcome of the Oil Recovery and higher energy prices is both positive and negative:

On the positive side, investing in oil and energy is presenting a very rare opportunity to buy at the bottom near 20-year lows.
On the negative side, rising oil prices will result in higher fuel costs. You can probably forget about the extremely cheap $2/gallon Gas prices.

Even worse, those who neglect to invest in Oil and Energy now are likely to lose twice - once by missing the long-term bottom in oil, and once by having to pay more at the pump.

In a few years we will be talking about how low oil & gas prices were.
Oil prices are close to what they were in the 1980s and 1990s.
Now is the time to invest in oil.

The Zombie Trend

Is it not obvious that CNBC & The Walking Dead plagiarized my article?

• I wrote an article about Zombies and the Stock Market / Economy in November 2012. 
• I sent the link to the creator of the TV show, AMC's "The Walking Dead", Robert Kirkman.
• I was (separately from this) interviewed by CNBC's Maria Bartiromo.
• A few months later, Robert Kirkman is on CNBC with Maria Bartiromo to discuss the connection between Zombies and the Stock Market / Economy.  

Watch the short video, then read my article, and tell me this isn't a bit "suspicious".


November 2012:
















March 2013:

See CNBC: “‘Walking Dead’: Zombies Thrive on Weak Economy”

In November 2012 I wrote the article below, titled "Investing In Zombies".
I had been a big fan of zombie movies for years, and I knew zombies were about to get very popular again.

Until then, zombie fans like myself were largely disappointed by the lack of both quantity and quality when it came to zombie movies. It was rare to see a well-written, well-produced, well-received zombie movie; most were low-budget films that only true zombie fans could even tolerate. Of course, there are the "zombie classics" and other favorite zombies movies, but they are few in comparison to the multitude of zombie movies and TV shows that have been released over the past few years.

We have just lived through and witnessed one of the biggest waves of zombie popularity in history, perhaps for years to come. #1 watched TV shows, mega-studio films, zombie costumes, zombie 5k races, zombie economies, zombie video games, etc etc.
There is still some time left in this "zombie trend", but the highest peaks of popularity are already behind us.

We've seen the massive popularity of Vampires, then Zombies. What's next? Ghosts? Aliens? Werewolves? Evil Robots?



Investing In Zombies
Originally published: November 13, 2012

http://seekingalpha.com/instablog/763684-chartprophet/1254481-investing-in-zombies

Many stocks and companies may be at the end of an uptrend and are becoming "dead money", but investing in the "living dead" and the strengthening popularity of the Zombie theme could be a profitable opportunity.

With The Walking Dead as this fall's most popular television series, and with AMC Networks (NASDAQ:AMCX) reporting earnings this Thursday November 7th, is it a good investment? Moreover, with Viacom (NASDAQ:VIA) behind a potential blockbuster hit zombie movie coming out in 2013, and with Activision (NASDAQ:ATVI) soon releasing two hugely profitable zombie games, is now the time to buy?

Below, I will make the case for (1) Why zombies are the new craze, (2) How they are replacing vampires as the more popular theme, and (3) What companies you can invest in to profit from the growing trend.

Why Zombies?

Zombies represent how the world economy has been behaving and how a lot of people currently feel about the future. Zombies are slow, mindless, physically-decaying, and brutal beings with no long-term goals, no productivity, no sign of recovery, and no desires other than eating human flesh. Unfortunately, the economy and stock markets have behaved very similarly over the past 10+ years, or "Lost Decade": We've seen huge ups and downs, instability, massive turmoil, increasing risks and dangers, unfathomable events, and the collapse of much of life as we once knew it. In fact, the similarities have been so staggering that we've seen the emergence of some very popular nicknames: "zombie economy", "zombie banks", and "zombie debt" among others.

Obviously many things have greatly improved over the years, but all the volatility and chaos of multiple recessions and never-ending uncertainty have truly eaten away at people's confidence. Most investors just can't understand what's happening. Even the top business executives, politicians, fund managers, and experts have no clue what to do!

In a zombie economy, there is a self-perpetuating sense of doom - the feeling that there is no solution; that the sickness is unstoppable and the predator unkillable; the fear that even those in command have little idea how to fix things.

CNBC - Why_Zombies_Are_Taking_Over_the_Economy

So why zombies? Because all of the fear, dread, and impending doom that people are feeling about the economy or personal safety. The solutions seem to escape us, the situation doesn't appear to be improving, and it feels as if everyone is either fighting to survive or preying on the weak. To many, the world feels like a harsh, dangerous place with a bleak future; it is precisely when people feel this fearful or discouraged that zombies have the most appeal.

Zombies vs. Vampires: The Triumph of the Zombie

Unlike the decaying, numb, and senseless zombie, the vampire stands for beauty, immortality, and conscious pursuit of power (though it still uses evil methods to get there). The positive characteristics of a vampire are therefore a lot more appealing when people are feeling more positively about themselves or their situation.

It is no surprise then that the two most popular vampire television shows (Buffy The Vampire Slayer and HBO's True Blood) and the most popular vampire novels and movies (Twilight) of the past 20 years were started during very positive periods for the economy.Buffy came out in 1997, as the US was at the height of its most impressive bull market ever; True Blood was developed in late 2005, near the height of the housing bubble (it made its television premiere during the recession in September 2008, but only months after the all-time peak in stocks); and the Twilight novel was released in 2005, also near the height of the housing bubble (the massively successful movies were released in 2008-2011, but well after the novels had already become best-sellers).

According to a Google books (NASDAQ:GOOG) search comparing the frequency of the words "zombies" and "vampires" in books, "vampires" have been the clear winner by far from 1940 to 2008, with an increasingly sharper rise since around 1987:

But I am happy say that vampire popularity has finally peaked. With the most successful books, shows, and movies now behind us, vampires can no longer outdo themselves. Yes, they will one day come back in a huge way, but the cycle is on its way down. When 13-year-old girls become completely obsessed with vampires (as they have with Twilight), the trend is over. It is now time for zombies to take control.

A simple indication of the soaring triumph of zombies over vampires is visible in a Google Trends search:

When we plot all of the search volume for the terms "zombies" and "vampires" since 2004, we can see how zombies have completely dominated since late 2008. While "vampires" was the more popular term for most of 2004-2008, "zombies" has skyrocketed upward since late 2008 and has massively led "vampires" since early 2009. We can see the big increase in "vampires" due to the Twilight success in 2010, but "zombies" is the runaway winner.

Rising Zombie Popularity

The growing popularity and success of the zombie theme is evident in best-selling comics and books, a top-rated television show, an upcoming blockbuster movie, zombie video games, a 5k "zombie race", and even a warning from the CDC (Center for Disease Control and Prevention - a governmental organization) about a "zombie apocalypse".

Perhaps the clearest sign of the growing zombie popularity is the hugely successful television show, The Walking Dead. The show, already into its third season, is so popular that its premiere in October 2012 was the highest-rated entertainment series this fall. It was already the most successful cable drama of all-time, but the Walking Dead premiere was even more popular than all of the big broadcast entertainment shows including ABC'sModern Family. Only football and live sports are more popular than zombies right now.

The Walking Dead television series is based on the bestselling comics written by Robert Kirkman. The books have been selling so well that (as of November 6, 2012) Kirkman is #26 in Amazon's (NASDAQ:AMZN) top 100 authors! He has probably been even higher up.

Moreover, he currently has two books in Amazon's top 100 bestseller list:

Before The Walking Dead, author Max Brooks published two bestselling books about zombies - The Zombie Survival Guide (2003) and World War Z (2006).

Brooks' books have been so popular that Brad Pitt's production company, Plan B Entertainment, secured the movie rights in 2007. Brad Pitt will star in World War Z (set to release on June 21, 2013), with The Zombie Survival Guide set for a 2014 release.

We are yet to find out if the movies are even good, but with superstar actor Brad Pitt starring in an upcoming zombie movie, we can safely say that the zombie theme is going strong and may have much more room to go.

 

In fact, the number of zombie movies released each year has soared since 2000:

And in comparison to the stock market:

Source: Wired Magazine

Such rapid growth in popularity is a bit disconcerting, but aside from The Walking Dead we are yet to see true blockbusters in the zombie category in this cycle. We've seen big success in zombie-like movies such as Resident Evil (2002), 28 Days Later (2002), and I Am Legend (2007), but I think we are still not at the peak-level vampire equivalents likeTwilight and True Blood.

Running away from zombies has even become a fun 5k race, as participants run and scale an obstacle course while avoiding the zombies that attempt to take their life, or in this case the flags on their belts:

runforyourlives.com

Even the Centers for Disease Control and Prevention (NASDAQ:CDC) warned about a "zombie apocalypse". In a shocking public campaign by a governmental organization, the CDC urged people to be prepared for zombies. Why?

"If you are generally well equipped to deal with a zombie apocalypse you will be prepared for a hurricane, pandemic, earthquake, or terrorist attack." So please log on, get a kit, make a plan, and be prepared!

-Dr. Ali Khan, CDC Director

CDC.gov

How To Invest

Zombies have been estimated to be worth over $5 billion to the economy. Between movies, video games, television, comics, books, novels, Halloween costumes, merchandise, and other items, the zombie category is both far-reaching and very lucrative. So with zombies probably getting even more popular in the next few years, here is how you can cash in:

1. Zombie TV: The Walking Dead. Perhaps the most popular within the zombie theme is the #1 show The Walking Dead. Already the top-rated entertainment series on TV this fall, the air-time for commercials during the show have been fetching between $200,000 and $375,000 - more than the top primetime shows. The biggest winner from this is AMC Networks , the network that owns the AMC, IFC, and Sundance channels. AMC goes well beyond zombies, with IFC and Sundance being the top independent film channels. Even more, AMC also features top shows Mad Men andBreaking Bad.

Those who would like to profit from The Walking Dead can look at AMC Networks as a potential investment. However, while its shows have been hugely successful and its ads have been selling for a lot of money, AMC Networks is not necessarily a strong buy. The company has a $3.5 billion market cap, decent growth numbers, and very strong future catalysts; but its PE ratio is relatively high at 22.5, it has a lot of debt ($2.28 billion), and its stock has already seen a nice run in the past four months.

AMC is reporting earnings on Thursday November 8th, which could send the stock price up even more. AMC could benefit from the $700 million settlement that it won together with Cablevision (NYSE:CVC) against Dish Network (NASDAQ:DISH), when Dish removed AMC's channels from its service. However, because the stock price is already at the top of the upward sloping "channel" seen in the chart above, together with minor divergence in the Relative Strength (RSI), I'd rather be more cautious here and see what comes of earnings. A small position would be smarter here, but waiting for a pullback could prove to be safer and more profitable.

2. Zombie Movies: World War Z. With Brad Pitt starring in the upcoming movie World War Z, betting on the potential blockbuster hit could be a very smart move in anticipation. Unlike The Walking Dead which is already a big hit and may already be factored into AMC's stock price, betting on World War Z now will make you one of the first to do so.

So how do you do it? World War Z will be distributed by Paramount Pictures, a subsidiary of Viacom . Investing in Viacom, then, could be the best way to profit from a potential future zombie hit - especially when it stars Brad Pitt. Viacom is a powerhouse, and runs MTV, VH1, Nickelodeon, CMT, BET, and Comedy Central. There are obviously a lot of good things going for it, then.

On a weekly chart, Viacom looks a bit dangerous. It has sharply reversed down from a recent peak, it is far above its 200-day moving average at $40.64, and its relative strength (RSI) and momentum (MACD) indicators are still pointing down:

On a daily chart, however, Viacom looks like it is approaching a pretty good buying opportunity after sharply falling from over $57 to $50 in just a month. The relative strength and momentum indicators are still negative, but for those looking to buy, $50 and $47-48 are pretty good low-risk buying opportunities at support. Viacom also pays a 2% dividend.

3. Zombie Video Games: Call of Duty and The Walking Dead. The best way to profit from the zombie genre is probably through the gaming industry. Luckily, there is one company that is far and beyond the number one force behind the zombie games.

Activision Blizzard is THE player here. Not only is Activision Blizzard behind the bestselling games World of Warcraft, The James Bond series, The Amazing Spiderman, and the upcoming Diablo and Starcraft, but ATVI is the company behind the Call of Duty series and the upcoming The Walking Dead video game.

Call of Duty has been one of the top video game series of all-time, and since 2009 has included a "zombie feature". Black Ops II will be coming out on November 13, 2012 and is expected to be a top-seller. Even more, Activision is expecting the release of The Walking Dead: Survival Instinct in 2013. Both of these games combined spell major profits for Activision .

Activision looks pretty good financially, with a $12.32 billion market cap, a 15.8 trailing PE, $3.19 billion in cash ($2.87 per share), zero debt, and a 1.6% dividend.

When it comes to the charts, there is both some opportunity and some risk. In the long-term chart, we can clearly see ATVI's massive run since 2000. In 2008 it took a very big hit, losing over 50 percent of its value. Since then, it's been in a sideways trend and appears to be in the midst of choosing a direction. It may have broken below its long-term uptrend, but $10 and then $8 should be decent support levels.

The daily chart looks a bit better. Though we are still below the 50 and 200-day moving averages, it appears that ATVI could have bottomed for now near $10.80 and may begin a new uptrend. The momentum is diverging and signaling more positive price movement ahead. If prices can break above the 200-day moving average and the downward-sloping trendline near $12, ATVI looks very good.

Conclusion

With the massively growing popularity of zombies, and their increasing success over the vampire theme in recent months, investing in zombie-related companies could be highly profitable.

I personally have been a huge fan of zombies and apocalyptic movies almost my entire life. Is it not fun and exciting to imagine worst-case scenarios and how you would find a way to escape or survive? Maybe it's just me, but I think that playing out multiple situations, and mentally planning what you would do, applies to much more than just escaping zombies or avoiding a worldwide pandemic. In reality, the ability to be well-prepared for all kinds of scenarios could help improve your relationships, protect your investments, and even save your life!

Watch your back, protect your investments, and buy companies that benefit from the zombie craze. I think we're only in the early to middle stage of the Mania Phase in zombies.