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Something New!

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Hi everyone: To stay true to our mission, you’ll find something new regarding our methodology. In the coming weeks, you’ll see this table in our work going forward. We just wanted to let you know. We appreciate your membership very much!   ——————————————— About Our Name But how, you will ask, does one decide what [stocks are] “attractive”? Most analysts feel they must choose between two approaches customarily thought to be in opposition: “value” and “growth,”…We view that as fuzzy thinking…Growth is always a component of value [and] the very term “value investing” is redundant.                          — Warren Buffett, Berkshire Hathaway annual report, 1992 At Valuentum, we take Buffett’s thoughts one step further. We think the best opportunities arise from an understanding of … Read more

New Payment Option! Valuentum Research Update!

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Hi everyone: — We’re excited to say that we’re adding additional payment flexibility at Valuentum. — Many members have expressed interest in paying via other providers, and we have added Square to the mix. You can use credit or debit card or bank (ACH) to pay via invoice. — With all of the goings-on in the financial technology and payments space, we wanted to continue to provide members options to pay their memberships how they want and through who they want. You can always reach out to us at info@valuentum.com. — You’ll notice that we’ve also tightened our focus at Valuentum during the past 12-24 months in advance of what has certainly become a more difficult 2022 than even some … Read more

Hit or Miss in the Video Gaming Entertainment Industry

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The Valuentum analyst team talks the latest and greatest trends in the video game entertainment industry from tried-and-true titles to the financial positions of the largest players to retail big box and beyond. ~9 mins. Kris Rosemann: Welcome to Valuentum’s podcast. I’m Kris Rosemann and joining us today is Mr. Chris Araos. Chris, you have a strong background as an observer of trends in the video game entertainment industry. How would you say the world of gaming is shaping up these days? Chris Araos: Well, Kris — a lot has changed in video gaming in just the past five years thanks to the emergence of more-advanced mobile phones, which are just great devices to play games on. Unlike PCs or … Read more

Valuentum Economic Castleâ„¢ Rating Update

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Read: Keeping the Horse Before the Cart: Valuentum’s Economic Castle™ Rating The Economic Castle Focuses on the Magnitude of Economic Value Creation The Valuentum Economic Castle™ rating is an enhancement of the competitive advantage framework (commonly known as economic moat analysis) that has become widespread and ubiquitous within the investing world. Whereas an economic moat framework evaluates a firm on the basis of the sustainability and durability of its competitive advantages, Valuentum’s Economic Castle™ rating evaluates a firm on the basis of the firm’s future economic profit spread (return on invested capital less its weighted average cost of capital). The companies with the strongest Valuentum Economic Castle™ ratings are poised to generate the most economic value for shareholders in the … Read more

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