Stock Smackdown: Cramer vs. CAPS

There's no denying that Mad Money host Jim Cramer is entertaining, popular, and passionate. On many occasions, he's even right. So he's smart, funny, and the closest thing to a stock market rock star -- but is he smarter than you?

Cramming for Cramer
The Fool's free investing community, Motley Fool CAPS, aggregates the opinion of more than 130,000 members to assign ratings for each stock's likelihood of outperforming or underperforming the market.

Below, we look at some top stocks that Cramer picked and panned during last week's "lightning rounds," and we compare them with how the CAPS community sees their future.

Cramer says …
There's retail, and then there are retailers, and it seems foolish to lump them all together as a single entity. Yet Jim Cramer seems to do just that when he recommends that viewers sell GameStop, by suggesting there are better retailers to invest in.

I actually think the GME sales have not been that good ... sell, sell, sell. ... I do not like GME. I've got a ton of retailers that I like more. I think the GME is a played-out name ...

The game retailer's investors were delivered a one-two punch with an earnings report that offered less-than-gangbusters growth guidance and the news that Wal-Mart (NYSE:WMT) was, er, getting in the game by installing used-game buying kiosks. Yet we've heard this story before. Netflix (NASDAQ:NFLX) was supposed to be dead and buried by now because Wal-Mart had gotten into the movie-rental business. Of course, it didn't take long before Wally World bailed out on the niche market and handed over its customer base to Netflix, which remains as strong as ever.

There are indeed things that Wal-Mart excels at, and few retailers have been able to come close to its performance in this recession. But that doesn't mean it can do everything exceptionally, and the typical game-buying demographic is not necessarily the type that will be attracted to Wal-Mart.

CAPS says …
With 95% believing GameStop will outperform the market, the CAPS community thinks the Mad Money host doesn't have game. Believing that the threat of retailer competition is just one of many concerns that have been overstated, CAPS All-Star Har1en says the game specialist's quantity of titles serves as a competitive moat against the more limited inventory of Wal-Mart or even Best Buy (NYSE:BBY).

Yes, digital downloads are coming, but there is always going to be a place for physical stores because of the blockbuster nature of the industry. Waiting for downloads is inconvenient, slow, and subject to catastrophic hard-drive failure. Also, children do not have credit cards. After the recent credit card legislation, many college students won't have them either.

The Walmart/Best Buy competition is overblown. Those stores do not have the proper culture and brand to handle used titles in bulk. The draw of a Gamestop store is the sheer quantity of good titles that they carry, even used. I would be surprised if other non-specialty stores could compete.

Finally, Gamestop has great service: from a great industry magazine that both encourages sales and teaches customers about the industry to the knowledgeable people in their stores who actually play the games, they make gaming cool. Good luck getting that service from Walmart.

Your say
While CAPS members may stand with Jim Cramer or on opposite sides of the field, the investor-intelligence community is more than what some All-Stars think, even if they are TV personalities. But what do you think? Is Cramer right or off his rocker? Why not head off right now to CAPS and sound off with your thoughts on whether GameStop is still in the game?

Motley Fool CAPS is a great place to start your own research on these stocks. Read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made -- all from a stock's CAPS page. Best of all, it's free!