Two Recommended Stocks: ATVI and WOOF

The June 8 issue of Forbes included 2 interesting stock picks:

1. Activision Blizzard (ATVI) - This company was created last July with the merger of Vivendi's Blizzard Entertainment and Activision. Vivendi is now the largest shareholder, but Activision's boss, Robert Kotick, is the CEO.

After the merger, the company has three franchises: World of Warcraft, Guitar Hero, and Call of Duty.

The stock trades at $12.64, has no debt, and has $2.35 per share in cash. The company says it should earn 63 cents per share in 2009. Analysts predict it will earn 79 center per share in 2010, when it releases Guitar Hero Van Halen, DJ Hero, and Wrath of the Lich King in China.

2. VCA Antech (WOOF) - It operates 471 animal hospitals and 44 veterinary diagnostic labs. Unlike human health care, most payments are in cash and they don't have to deal with Medicare. It's bad-debt expense has averaged less than 1% for the last 3 years. Their revenues and profits were up 10% in 2008.

Revenue only gained 3% in the first quarter of 2009, but their managers are "rabid cost-cutters". The stock is up 22% in 2009, but they are still buying veterinary practices, and analysts feel it is a "recession resistant" growth stock.

These stocks should be good for buy/hold, but should work really well with my Stock Trading Riches System, which captures volatility through its re-balancing formulas.