The Consumer Stock Network Best Ideas List: GameStop (NYSE: GME)
Posted Tuesday, June 10, 2008 at 4:28 PM by R J HottovySince it is a relatively slow retail news week, we thought it might be worthwhile to publish a list of our favorite consumer stocks. Given the significant number of headwinds facing consumers (such as record high gas prices, declining home values and the corresponding "wealth effect," and lingering credit concerns), we concede that this space may not be appropriate for all investor classes in at the present time. That being said, we still believe there are a number of compelling investment ideas to be found in this sector.
Instead of a long-winded recap of the names, we've decided to release the names one-by-one and provide a brief summary. After we finish revealing our favorite stocks, we will pull together the list into an equal-weighted portfolio and compare our performance to a number of benchmarks over the next year. We may also adjust the list periodically, as there may be better investment opportunities that arise in the coming months.
We'll begin today with video game retailer GameStop (NYSE: GME).
Investment Highlights
- Opportune hardware/software cycle timing. Historically speaking, video game retailers are the most profitable during the second and third years following a major hardware platform release. Software presents much higher margin opportunities than the consoles they are played on because they are easier to mass produce and require fewer input costs. The latest round of consoles were released in late 2005 or early 2006, meaning that we are currently in this "software sweet spot". Coupled with an impressive line-up of already released and upcoming titles, we expect video game retailers to continue to post excellent profitability over the next 12 months.
- Economic stimulus check benefit. In our opinion, the Street is overlooking a key consideration of the economic stimulus payments - the age of potential recipients. Individual taxpayers with an adjusted gross income of less than $75,000 will receive the full $600 rebate (joint taxpayers with less than $150,000 will receive $1,200). Yes, The majority of economic stimulus checks will be sent to lower- and middle-income families who will likely spend excess funds on basic necessities or service personal debt requirements. However, there is also large number of stimulus check recipients between the key video-game playing ages of 18-35 that don't necessarily have to worry about housing payments or gas price inflation. Coupled with the recent and upcoming release of highly-sought titles, strong sales should persist for several quarters to come.
- Leisure activity substitute. Given the recent attention on soaring gas prices, we also expect discretionary spending on travel and other leisure activities to be down substantially this summer (and likely into the back half of the year). As a result, consumers will likely substitute lower-priced leisure activities and we believe video game retailers (especially those with family-friendly titles) could be a key beneficiary.
- Valuation. Unlike most retailers and other consumer-related stocks, GameStop's stock has held up reasonably well over the past year. At 19x the consensus fiscal 2009 estimate of $2.38, the stock may be too expensive for some investors, even those willing to give the stock a premium valuation. However, the recent pull-back presents an opportune entry point and we believe there could be some upside to the full-year numbers due to the reasons we outlined above, meaning the stock would be more attractive using forward multiples.
- Longer-term competitive threats. A few years from now, we are concerned that, like movies and television shows, video game purchases and rentals will be a largely online experience. However, the average consumer does not have the in-home bandwidth or storage capabilities to download large video game files at this time, and we believe GameStop has at least a few years of protection before facing a serious online competition. That being said, we welcome increasing efforts by GameStop to expand its online game sales operations.
Disclosures
Employee of The Consumer Stock Network, LLC is a member of the Board of Directors or an advisor or officer of the Subject Company. NoAnalyst or household of analyst is a member on Board of Directors or serves as an officer, director or advisory board member of the Subject Company. No
Analyst or household of analyst owns shares in Subject Company. Yes, we hold a small long position in GameStop
Analyst or household of analyst owns options warrants, or futures in Subject Company. No
Great post, what you said is really helpful to me. I can’t agree with you anymore. I have been talking with my friend about, he though it is really interesting as well
Learn Stock Market
mont blanc pens for sale
the north face jackets
uggs on sale
ralph lauren outlet
coach outlet store online
ray ban sunglasses
cincinnati bengals jerseys
adidas yeezy 350
rolex watches
ugg sale
201610.5wengdongdong
louis vuitton purses
ray ban glasses
nike roshe run
canada goose jackets
canada goose online
air jordan shoes
ugg boots clearance
the north face outlet
ugg boots
cheap oakley sunglasses
2016.12.24chenlixiang
timberland
superdry clothing
kate spade handbags
uggs outlet
nike air max
the north face
ugg boots
north face
kate spade outlet
beats by dre
201711.13wengdongdong
michael kors outlet online
polo ralph lauren outlet online
pandora charms outlet
canada goose
michael kors outlet store
air max
pandora uk
coach outlet online
ugg outlet
cheap jordan shoes
20171204yuanyuan
Also, green tea helps increase energy and boosts rate of Cla Safflower Oil metabolism Additional advantages of green tea extract include weight loss, reduced.
http://www.drozhealthblog.com/cla-safflower-oil/
Awesome Information sharing .. I am extremely cheerful to peruse this article .. much obliged for giving us experience info.Fantastic decent. I value this post. visit here for
Buy Instagram Followers UK
This is a wonderful post.thanks for sharing scout from barkbox for dogs
Extraordinary Article it its truly useful and creative update us as often as possible with new overhauls. its was truly important. much appreciated.
Status For Whatsapp
Emotional Status For Whatsapp
Cool Whatsapp Status
Love Status in Hindi
This is an extraordinary motivating article.I am practically satisfied with your great work.You put truly extremely accommodating data.
si swimsuit
red sox news and rumors
genie bouchard
ricci rivero
Much obliged for sharing the data, keep doing awesome... I truly delighted in investigating your site. great asset...
6 Inspirational Blogs
much thanks to you for an awesome post.
The Standard Methods For A Better Residence Organization
It is an extraordinary site.. The Design looks great.. Continue working like that!.
Find Out How To Buy Exciting Toys Like A Pro
Simply respecting your work and considering how you dealt with this web journal so well. It's remarkable to the point that I can't stand to not experience this significant data at whatever point I surf the web!
Technology Trends for 2018
20180629 junda
longchamp handbags
canada goose jackets
michael kors outlet
true religion jeans
michael kors outlet
ray ban sunglasses
nobis outlet
golden goose sneakers
stuart weitzman shoes
kevin durant jerseys
I know your aptitude on this. I should say we ought to have an online discourse on this. Composing just remarks will close the talk straight away! What's more, will confine the advantages from this data.
Imperial Resource Group | Digital | Technology | Systems | Security
so nice i like it.
InflatableSwimmingPool
Diet plan with bananas, a bloodstreamrapid tone doctor reviews group diet plan, a milk diet .
carbohydrates for the creation of energy keto plus supplement, which makes significantly less than what fat produces.
our society's near obsession with slimming down does keto work because of pervasive weight stigma and the conflation
Nice Post Dear live psl match streaming
Awesome post merry christmas wishes gift
nike air max 270
lacoste polo shirts
air force 1
cat boots
off white
reebok shoes
hermes belt
stephen curry 5
coach outlet
jordan sneakers
Make sure the order will be received by the recipient or you may have to bear the redelivery charges as well. So, this is an important point to keep in mind when placing your order.http://followersuk.co.uk/http://epicfollowers.co.uk/
prepared keto meals keto fiber supplement keto fuel review controls the fat storage in your body. It eliminates the fat from your body, especially from the for you. Many people don’t know much about ketosis, which is why they don’t believe any keto supplement. low carb fiber supplement
https://www.smore.com/e0jgk-keto-ultra-diet-reviews-shark-tank
Pandora Jewelry Official Site
Pandora Official Site
Jordan Retro 11
Yeezy boost 350 v2
Nike Air Max 270
Kyrie 3 Shoes
Pandora Jewelry Official Site
Kyrie Shoes
Air Jordan Retro 11
Rodney20190412
dasu hindi status collection Boys Attitude Status
Google has declared that a component that has been in beta since 2019 is presently commonly accessible
Great Content
POP Style TV
Shutters in Blackheath
Locksmith provides services in key cutting, changing locks, repairs auto locks also helped in repairing faulty and damaged damaged locks. Locksmith upgrade locks according to BS3621 British standards which fulfill your all insurance requirements. All Locksmiths are (Master Locksmiths Association) MLA Approved so we are fully vetted, inspected and qualified.
UK's dedicated and professional Shop fitters are here. We offer many membership benifits to help support those in shoplifting and interrior. we also offers a number of benefits which can help your business win work, train your team. We show you how to create that first impression that will keep customers coming back.