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  Take Two Interactive
TTWO
Gamestop Inc.
GME
Dendreon Corporation
DNDN
  Morgan Stanley, Inc.
MS
Goldman Sachs Group Inc.
GS
TheStreet.com, Inc.
TSCM
  General Motors Corporation
GM
Apple Inc.
AAPL
Citigroup, Inc.
C

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  Herb Greenberg

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Marty Rod

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Jim Cramer

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Giles David
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Michelle Quinn

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Perry H. Rod

Giles David

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George Soros

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Carl Icahn

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Anatoly Chubais

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Market Rap Featured Analysis

 

Are We Wrong on GME?

by breinejm , Published: May 29th, 2015 12:19 PM CDT

Featured Analysis

Reading earnings news on Gamestop Inc. (GME), I am, for the first time, questioning if we are right with GME. I know digital is increasing, but they are getting some of that pie. The customers are extremely loyal and buy DLC (cards) through them. Their Apple product sales are increasing as Apple is increasing their product offerings. Combined with this being one of the most heavily shorted stocks and relatively cheap on a P/E and P/S basis, I wonder if we shouldn’t be more bullish on GME. Maybe it is because I thought of buying at 39 as an earnings play but did not and now I have remorse!

Consider:

Estimates for FY (Jan) 16 – 3.83 (same as guidance) and FY17 – 4.38. This puts P/E at 11.5 and 10, respectively (based on share price of 44). I think this year's EPS guidance may be a bit low.

Comparisons to Radio Shack – one major difference, GME has customers in their stores. Same store sales (stores open >1 year) were up over 8% YoY. Digital sales were up over 20% and expected to hit 1 billion this year (~10-11% of rev’s). Not smart enough to understand the effects of AT&T and Cricket, but it doesn’t hurt, right?

Last quarter new generation console sales surpassed old generation (360, PS3), but software resales were down 3.4%. To me this means there is a lot of growth potential in this cycle in reselling XBOX One and PS4 games.

Simply Mac – It amazes me, but I can never talk sense to the Applephiles. They will spend double on a phone or triple on a laptop because it has a partially eaten apple logo. I think the potential of being an official Apple reseller is huge and with only 71 stores currently, this will provide growth.

Earnings – the Q1 beat of 9 cents was due to Mortal Kombat X, Electronic Arts (ERTS)' Battlefield Hardline, Take-Two (TTWO)'s Evolve and...

MARKET RAP SELECTED ARTICLES

 

Are We Wrong on GME?
Reading earnings news on Gamestop Inc. (GME), I am, for the first time, questioning if we are rig...

breinejm
 

Take Two Analysts Weigh In on Latest Earnings Report
Take Two Interactive reported stronger than expected results for the final quarter of their fisca...

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Watch Out For the Real Inflation Rate of Seven Percent
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