Based on the aggregated intelligence of 115,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, video game retailer GameStop (NYSE: GME ) has earned a respected four-star ranking. While five-star stocks have been the best performers, our data has shown that four-star stocks still outshine the market by a significant margin and shouldn't be taken lightly; conversely, low-rated stocks have woefully lagged the market average.
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.
GameStop facts
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Headquarters (Founded)
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Grapevine, Texas (1994)
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Market Cap
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$7.43 billion
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Industry
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Electronics Stores
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TTM Revenue
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$8.09 billion
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Management
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CEO Daniel DeMatteo (since August 2008)
CFO David Carlson (since June 2000)
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Return on Equity (avg. last three years)
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15%
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Major Competitors
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Best Buy (NYSE: BBY )
Wal-Mart Stores (NYSE: WMT )
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CAPS members bullish on GME also bullish on
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Google (Nasdaq: GOOG )
Johnson & Johnson (NYSE: JNJ )
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CAPS members bearish on GME also bearish on
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Research In Motion (Nasdaq: RIMM )
Amazon.com (Nasdaq: AMZN )
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Sources: Capital IQ, a division of Standard & Poor's, and Motley Fool CAPS. TTM = trailing 12 months.
Over on CAPS, some 97% of the 719 All-Star members who have rated GameStop believe the stock will outperform the S&P 500 going forward. These All-Star bulls include Radioman101 and my Foolish colleague Todd Wenning (aka TMFPhila), both of whom are ranked in the top 1% of our community.
In January 2007, Radioman101 noted that, "No matter which video game system you like and no matter what games you like to play, [GameStop] is the place that people buy them. ... Plus everyone goes there to buy used games and the margin on that part of the business is excellent."
A more recent pitch from Todd in late June agrees with that bullish line of thinking, challenging our community to check out what the GameStop's all about:
With gas prices high and money tight, people will be staying home more to play video games, watch DVDs, etc., rather than going out for entertainment.
Don't believe me? Stop by your local mall and see the foot traffic at GameStop versus the apparel stores. The demographic diversity of the customer base is impressive as well, from adults in suits to teens to little kids, men and women alike.
The recent pull-back offers an enticing entry point. Thumbs up.
What do you think about GameStop, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. More than 115,000 investors are waiting to hear what you have to say. CAPS is 100% free, so simply click here to get started.
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