ATVI

GameStop Tumbles on Lower Than Expected Holiday Outlook

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One of the ‘Top 25 Overvalued Stocks on the Market’ reported third-quarter results Thursday. GameStop (GME) represents the latest firm that we highlighted as significantly overvalued to engage in a large pricing correction toward our fair value estimate. Third-quarter results at the world’s largest video game retailer weren’t the problem. Total global sales advanced 18.8%, while comparable store sales rose 20.5%. Sales of new software increased 43.1% thanks to strong performance from Grand Theft Auto V. Hardware sales also performed well, jumping 15.3% thanks to a strong sell-thru of Nintendo 2DS and 3DS. Pre-owned sales, however, declined 2%. The strong overall performance led to 675 basis points of market share gains. GameStop’s net earnings jumped 45.3%, to $68.6 million, while the … Read more

Grand Theft Auto V Will Drive Fantastic Results at Take-Two

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It is no secret that the video game industry is surprisingly cyclical for many players. Look no further than GameStop (click ticker for report: ), which has seen shares soar after a multi-year lull in games now appears to be over with the launch of Microsoft’s Xbox One (click ticker for report: ) and Sony’s PlayStation 4 (click ticker for report: ). The game-developing business is probably even more cyclical, but it has little to do with broader economic conditions. Rather, development is somewhat similar to biotechnology in the sense that developers may spend years developing a game before finally launching and recouping costs with extraordinarily high marginal profits. That story is playing out at Take-Two Interactive Image Source: TTWO … Read more

Shares of GameStop Look Expensive Even with Strong Guidance

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Retailer GameStop (click ticker for report: ) posted a steep decline in second quarter results that was overshadowed by a positive outlook for the back half of the year. Revenue fell 10.7% year-over-year to $10.4 billion, which was a bit better than consensus expectations. Earnings per share dropped 44% year-over-year to $0.09, which was also better than consensus estimates. Sales have been weak… Image Source: Valuentum, Company Filings Shares of GameStop are up 177% over the past year—a phenomenal increase given the steep same-store sales declines recently (shown above). Weakness didn’t moderate much in the second quarter, with same-store sales dropping 10.7% year-over-year. Of course, the rally in GameStop’s share price has little to do with what happened in fiscal … Read more

Microsoft Wants to Be the Apple of Your Living Room

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Earlier today, Dividend Growth Newsletter holding Microsoft (click ticker for report: ) finally unveiled its next generation console, the Xbox One. It wasn’t hard to tell that something big was around the corner for the next generation console, as the company had made some new hires including former CBS executive Nancy Tellem to head the firm’s content development initiative. Let’s take a look at the revelations and how it might impact the company. Steven Speilberg produces a Halo TV show As we mentioned earlier, Xbox’s move into exclusive content was not at all a surprise. In fact, we assumed we might hear about an exclusive TV show or movie even earlier. However, we were a little stunned to see legendary … Read more

Why GameStop Looks Like a Value Trap

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At Valuentum, we pride ourselves on a multi-faceted investment methodology, acknowledging that several market-movers view any given investment from different perspectives. That is precisely why we’re staying away from shares of GameStop (click ticker for report: ), which scores poorly on the Valuentum Buying Index (our stock-selection methodology). Let’s take a look at why we don’t like the company. Changing Dynamics of Gaming Culture One of the unique features of the video game market has been the relatively liquid buying and selling of games. Since the days of FuncoLand (which was eventually acquired by GameStop), consumers could purchase and sell games new or used, and the game shops would help facilitate this market. Have a copy of Nintendo’s Super Mario that … Read more

How to Think About Corporate Tax Reform

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Videogaming Business Becoming More and More Attractive

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Image Shown: The video game industry has been placing a much greater emphasis on growing their mobile gaming operations in recent years. Part of that strategy has involved leveraging existing IP and well-known gaming titles to appeal to a wide range of users. Image Source: Electronic Arts Inc – Second Quarter of Fiscal 2021 IR Earnings Presentation Executive Summary: Activision Blizzard, Electronic Arts, and Take-Two Interactive Software have pristine balance sheets, stellar cash flow profiles, and their business models are supported by secular growth tailwinds such as the rise of the global middle class (and more broadly, additional households in emerging economies gaining access to the internet), a growing casual and dedicated video game user base across the globe, and … Read more

Dividend Increases/Decreases for the Week of July 21

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Below we provide a list of firms that raised their dividends during the week ending July 21. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports use the ‘Symbol’ search box in our website header. Firms Raising Their Dividends This Week                          Activision Blizzard (ATVI): now $0.99 per share dividend, was $0.47. Aker BP (AKRBY): now $0.162 per share dividend. Banco Macro (BMA): now $0.45 per share quarterly dividend, was $0.0786. Bank of America (BAC): now $0.24 per share quarterly dividend, was $0.22. Bank of America Corporation Deposit Shs Perp Shs Series E (BAC.PE): now $0.3623 per share quarterly dividend, was $0.3222. Bank of New York … Read more