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The Company is a retailer of video game products and PC entertainment software.
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TMFBreakerDave (99.12) Submitted: 4/19/06 10:13 AM : Start Price: $23.50 GME Score: 56.16
Fully merged with Electronics Boutique, GameStop is now the #1 specialty videogames retailer. The next console cycle is already under way with the Xbox 360. The cycle ramps up explosively this year when the PlayStation3 hits in November. GameStop is positioned to do extremely brisk holiday business, and then will be a longer-term beneficiary as many of us purchase in the years ahead the compelling new games for our consoles. I don't think this is one of the great COMPANIES -- e.g. their online site has suddenly made it hard to cancel pre-orders, which I find really unimpressive and inconvenient -- you have to E-MAIL them instead of just clicking in to the store and canceling. That said, where's the direct competition -- the clear Pepsi to GME's Coke? I'm often looking for, and buying into, such situations. Longer term, the only potential threat I can foresee is direct sales via the consoles themselves, cutting out GME. But I think this stock is a long-term winner, passively held.
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TMFBreakerDave (99.12) Submitted: 5/18/06 7:15 PM
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Company just reported strong earnings today, powered up by Xbox 360 titles like Oblivion, and by Kingdom Hearts 2 for the PS2. Company now projects $2 a share in earnings for this fiscal year. For a stock at $46.22 as I write, that's a P/E of 23 for a niche category killer. I really like this investment.
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TMFBreakerDave (99.12) Submitted: 1/05/07 11:12 PM
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I have in the past expressed some skepticism about GameStop's longer term, with the prospect of more and more direct sales of gaming through Xbox Live, for instance. I have worried some about the bricks and mortar, which is always fair to do with a bricks-and-mortar retailer. But one calming thought is that GameStop and EBGames do serious business in trade-ins, for which their physical presence is really key. I just don't think people are as fired up about putting something in a box and mailing it back with postage, compared to the ease-of-use of trading in at their local GameStop. And these trade-ins are seriously profitable business for the retailer. So I think this is a great reason for bricks and mortar to persist over the longer term, and continue to reward GME fans as we have been rewarded for some years running, now.
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