2-Star Stocks Poised to Plunge: GameStop?

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Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, video game retailer GameStop (NYS: GME) has received a distressing two-star ranking.

With that in mind, let's take a closer look at GameStop and see what CAPS investors are saying about the stock right now.

GameStop facts

Headquarters (Founded)

Grapevine, Texas (1994)

Market Cap

$2.8 billion

Industry

Computer and electronics retail

Trailing-12-Month Revenue

$9.1 billion

Management

CEO J. Paul Raines (since 2010)
CFO Robert Lloyd (since 2010)

Return on Equity (Average, Past 3 Years)

13.4%

Cash/Debt

$138.7 million / $0

Dividend Yield

4.2%

Competitors

Amazon.com (NAS: AMZN)
Best Buy
(NYS: BBY)
Wal-Mart
(NYS: WMT)


Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 9% of the 3,186 members who have rated GameStop believe the stock will underperform the S&P 500 going forward.

This past summer, one of those Fools, OceanJackson, succinctly summed up the bear case for our community:

GameStop is in the same boat as Best Buy and RadioShack (NYS: RSH) . There are two kinds of retailers -- those that can't be eaten by Amazon and E-Commerce, and those that can. Electronics retailers are firmly those that can and will be completely destroyed. Especially, those dependent on physical media that are going digital -- namely, CD's, DVD's, Software, and Video Games. GameStop sells Video Games only and this makes them the prime candidate of the bunch to [short sell] -- big. ... There is no strategy that can save their model.

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The article 2-Star Stocks Poised to Plunge: GameStop? originally appeared on Fool.com.

Fool contributor Brian Pacampara has no positions in the stocks mentioned above. The Motley Fool owns shares of Amazon.com, Best Buy, GameStop, and RadioShack and is short RadioShack. Motley Fool newsletter services recommend Amazon.com, Best Buy, GameStop, and Wal-Mart Stores. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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