Take-Two Interactive Software, Inc. (TTWO)

TMFBadger03 (79.98) Submitted: 2/01/08 2:35 PM : Start Price: $16.93 TTWO Score: 52.00

This company sells at a discount to its peers, and I think it has some tremendous growth potential. GTA IV should be a best-seller, but this company is no longer a one-trick pony*. In fact, the top 10 titles have had a shrinking impact on overall revenues, from 48% in 2005, to 38% in 2006, to 27% in 2007.

The biggest negative hanging over the company is possible fines over options backdating. But that was caused by previous management and I don't think the impact would be crippling. Other than that, the only reason I can imagine for this great price is the lumpiness of sales. And as a long term investor, I'm just fine with that.

* TTWO had a big hit with Bioshock and are already planning Bioshock 2. Also, Borderlands is already creating some buzz and should be released at some point in 2008. By the way, it is being developed by Gearbox, the same guys that developed the Brothers In Arms series, not to mention the original Halo. This game looks awesome, combining first-person shooting with an RPG element. Throw in licensing deals with Nickelodeon, the 2K Sports franchise, and many other valuable names (including a new Civilization game!!!), and this company is building quite the portfolio.

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