4-Star Stocks Poised to Pop: GameStop

Based on the aggregated intelligence of 130,000-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.

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

Sources: Capital IQ (a division of Standard & Poor's), and Motley Fool CAPS.

Over on CAPS, 96% of the 3,038 members who have rated GameStop believe the stock will outperform the S&P 500 going forward. These bulls include elmedico27 and All-Star SteamedCrab, who is ranked in the top 10% of our community.

In late February, elmedico27 tapped GameStop as an ideal play on staying (and playing) at home:

As disposable income has greatly reduced, many more people are staying in with the Wii, PS3, or Xbox 360. ... GameStop has capitalized so well on the used game market, they are starting to anger the new game publishers.

In a pitch from three weeks earlier, SteamedCrab expands on what sets GameStop apart:

I've been a gamer my whole life, so I know games. GameStop isn't the cheapest for new games, and it's not the cheapest for used games. ... But as a matter of practicality, convenience and selection, they do not have an equal. ...

Almost all their money comes from operations, relatively small P/E ratio and … now an unprecedented interest in video games thanks to successful systems like the Wii (for everyone) and the Xbox 360 leads to a successful company in my eyes.

My only worry is a shift to digital distribution later down the road which could lead to a reduction in the trading of used games and purchase of new games at the retail level. That's more of a very long term issue though. Over the next two to four years, I see Gamestop doing very well in this tough economy, especially when compared to most other retail.

What do you think about GameStop, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. More than 130,000 investors are waiting to hear what you have to say. CAPS is 100% free, so simply click here to get started.