The Zacks Analyst Blog Highlights: Electronic Arts, Zynga, Facebook, Apple and Waste Management

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Aug 08, 2012, 09:30 ET

CHICAGO, Aug. 8, 2012 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Electronic Arts Inc. (Nasdaq:EA), Zynga Inc. (Nasdaq:ZNGA), Facebook Inc. (Nasdaq:FB), Apple Inc. (Nasdaq:AAPL) and Waste Management, Inc. (NYSE:WM).

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Here are highlights from Tuesday's Analyst Blog:

EA Accuses Zynga of Copying Sims

Electronic Arts Inc. (Nasdaq:EA) has sued Zynga Inc. (Nasdaq:ZNGA), alleging that some characteristics of Zynga's popular The Ville had unmistakable similarities with the former's The Sims Social. EA complained that Zynga had not only copied the basic structure of the game, but also that some of the characteristics of the game had been replicated.

This allegation by EA comes on the heels of launching the The Sims Social's latest version SimCity Social on Facebook Inc. (Nasdaq:FB), where The Ville is already available. Since the launch of SimCity Social, the game has garnered 10 million monthly active users (MAU), while the The Ville, which was launched last quarter, already has over 6 million daily active users (DAU). Thus, EA's lawsuit comes at an opportune moment with the intention to dent The Ville's popularity and establish its own game on Facebook.

This is not the first time that Zynga has been accused of copying games from other publishers. Earlier, Nimblebit had accused Zynga's Dream Heights of being a copy of the formers' Tiny Tower, which had won Apple Inc.'s (Nasdaq:AAPL) iTunes Rewind iPhone Game of the Year award in January. Also, Digital Chocolate had accused Zynga's Mafia Wars of being a rip off of the former's Mob Wars.

However, most of these cases against Zynga came from small developers and were subsequently settled out of court. This time around things may not be so easy, since Zynga is now up against EA, which has the financial muscle to pursue a lawsuit. The Sims has been one of the most popular franchises for EA and it was one of the major contributors to EA's robust digital revenue growth in the last quarter. Thus, the stakes are quite high for EA.

On the other hand, Zynga's future growth prospects will suffer a heavy blow if it fails to defend the lawsuit. Moreover, a ban on its The Ville game would have a negative impact on its top line. Legal costs would be another factor that the company would have to deal with.

Our Take

However, both parties could prefer to settle out of court, as legal battles are not only time consuming but also expensive. With the lingering macroeconomic sluggishness taking a toll on the overall video game industry, both parties would rather concentrate on their core operations to improve their company's fundamentals than get into a legal tussle.

We have a Neutral recommendation for both Electronic Arts and Zynga in the long term. Currently, both Electronic Arts and Zynga have a Zacks #3 Rank, which implies a Hold rating in the short term.

Waste Management Expands CNG Fleet

Waste Management, Inc. (NYSE:WM) recently announced the launch of a new fleet of 25 compressed natural gas (CNG) trucks and unveiled the first public-access, 24-hour CNG fueling station in Louisville, KY.

The new fleet of state-of-the-art vehicles will replace the existing heavy-duty collection trucks and will run on CNG, a cleaner fuel compared with to conventional gasoline or diesel fuel. The new fueling station will provide first-of-its-kind infrastructure to supply CNG fuel in Louisville.

Waste Management will likely add up to 25 CNG-powered collection vehicles in Louisville and plans to roll out additional CNG-powered collection vehicles in the area in the future. The public fueling station will serve Waste Management's local fleet as well as other corporate fleets and other vehicles running on CNG,

Waste Management, with its current fleet of approximately 1,700 CNG vehicles is the largest owner and operator of clean-running, heavy duty refuse trucks in North America. The company's goal is to develop the cleanest fleet of heavy duty trucks in the industry.

In 2012, natural gas vehicles are expected to represent 80% of Waste Management's new truck purchases and intends to sustain this trend for the next five years. Each of the natural gas fueled collection vehicle is expected to reduce diesel usage by 8,000 gallons annually and also reduce greenhouse gas emissions by an average of 22 metric tons.

Waste Management has opened 13 CNG stations across the country in the first half of 2012, of which 9 have public accessible fueling stations. Waste Management currently operates 31 fueling stations in North America and expects to bring an additional 17 fueling stations online by the end of the year.

Waste Management owns the stations, purchases the fuel and finances the construction of the stations. It also enters into maintenance contracts with third party companies. This strategy allows the company to secure better natural gas prices in the long run.

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