2-Star Stocks Poised to Plunge: GameStop?
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's business and see what CAPS investors are saying about the stock right now.
GameStopfacts
Headquarters (founded) | Grapevine, Texas (1994) |
Market Cap | $2.8 billion |
Industry | Computer and electronics retail |
Trailing-12-Month Revenue | $9.6 billion |
Management | CEO J. Paul Raines (since 2010) |
Return on Equity (average, past 3 years) | 13.6% |
Cash/Debt | $655.0 million / $0 |
Dividend Yield | 2.8% |
Competitors | Amazon.com |
Sources: S&P Capital IQ and Motley Fool CAPS.
On CAPS, 8% of the 3,199 members who have rated GameStop believe the stock will underperform the S&P 500 going forward.
Just last week, one of those bears, Motley Fool co-founder David Gardner (TMFSpiffyPop), touched on the tailwinds working against the stock:
The reason the stock will likely never find its all-time highs again is that consumer habit is changing, and things are going digital. GameStop is not a particularly innovative or visionary group -- I credit them for all their past success, but I have low confidence they will be able to transition to where the world is headed. Every day, more gamers are buying digital and direct, and thus have no used game to sell. As a gamer I appreciate GameStop still and have always had good feelings for the company; as a stockpicker, there are too many other companies in stride with where the world is headed, even just in this space. Underperform.
If you want to retire rich, you need to protect your portfolio from any undue risk. Luckily, we've found another retailer we are incredibly excited about -- excited enough to dub it "The Motley Fool's Top Stock for 2012." We have compiled a special free report for investors to uncover this stock today. The report is 100% free, but it won't be here forever, so click here to access it now.
Want to see how well (or not so well) the stocks in this series are performing? Follow the newTrackPoisedToCAPS account.
At the time thisarticle was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Motley Fool owns shares of GameStop, Amazon, Best Buy, and Wal-Mart. Motley Fool newsletter services have recommended writing covered calls on GameStop. Motley Fool newsletter services have recommended buying shares of Amazon and Wal-Mart, as well as creating a diagonal call position in Wal-Mart. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.
Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.
