The major flaw in what you posted - they only make 7 on dividends. If they really think it is going out in less than 10 years, and they have cash flow like they have now, then they take it private, and relatively quickly wind it down via the zero reinvestment route and putting the fcf into the coffers. Please, don't even imply that I could be so off the ball as to imply the current stated dividend is the a sole valuation parameter.
Jester- you think I don't know what I'm talking about because you don't read my posts carefully. For example, I made a point about how the company's stock performed in the years following the last console launches based on the company's SAME STORE SALE not number of stores. And if in the future you think someone is wrong, just critique his/her analysis with facts/logic rather than just dismissing them as "not knowing anything".
On Dec 1st, 2013, while GME was still close to 52 week high, I saw a pattern and raised this question. I am not an expert about the financial of GME nor outlook.
I really have no idea what you're talking about.
I'm not saying it doesn't make sense; just that I need to learn a little bit more ;)
Sounds right, though... lol.
For me... yes, I'll admit I need to learn more about financials; however, I've done fine going at stocks from a consumer psychology angle. As far as I'm concerned, two factors play prominently here in GME for me:
1) People like the physicality of brick and mortar; younger kids can't ride their bikes to Amazon. You can't get a mall experience online. Another thing about walking into stores: impulse buy. The immediacy of visiting and subsequently leaving a physical store doesn't play out online.
2) People like to own what they purchase. (People compare to Blockbuster, but movies are not games.)
When you take into account buyback and share price drop, this is now approaching a high yielder dividend level - which for a company growing its revenue base at 10% is noteworthy. Now, there is the short argument to be made that the cash flow will diminish over time and is not sustainable, hitting the dividend, but this is far from certain right now, and yesterday's news can be read to say that heavy console sales hit into available spend for software, and the new console cycle will then boost software sales later this year. If this is the case, the dividend is safe and with revenue growth at 10% or higher, the share price will move up sharply. Shorts will not hold if they have to pay out above 2% on the dividend (remember, they have to eat that cost). And institutions will view this as an attractive combination of yield and capital growth.
Might be tempting me but I looked at a chart and it had a long semi baseline then it started up. today it fell like a rock to about the halfway point of where the uptrend started. For me surely if it had fell below the long time established semi base Id jump. Now I am on a fence .chase a bull or ride a bear
Impossible to say for tomorrow, but it's likely to return to the $40 round number before long, and if it breaks that then it will probably fill the gap back up to the previous support range at $45.
bottom might be here but no history. It will probably rebound but I see a lot of unsure stuff in the market right now.I wouldn' t bet on a shot in the dark. Course it might win 5.00 a share 100 shares 3600 might get 4100.might not too .Earnings forcasts dropped . Course they got plenty of cash on their balance sheet. If it fell to 20.00 id jump for sure. This company looks very sustainable. p/e about 10 right now. iIs below average but is it really cheap? im not sure if it was short selling.I might look. Maybe
You are complimenting the analysis of a guy who compares GME to NFLX and who has no idea of the history of this company regarding last cycles price increases and store expansion. Until now, your own analysis was worthy of some respect.
Going with your analysis that a 7-10 year doomsday scenario is already priced in, why would someone buy at $36? In 7-10 years they'd make maybe $7 on dividends, which would surely be reduced later so call if $3.50 say. They'd lose $36 on the shares. Meanwhile the S&P could be how much higher in that time frame? Not exactly a compelling investment. For a private equity deal it may be more compelling, but then as an investor you're just hoping for a buyout, which doesn't seem like a compelling investment plan either since it could be years away, if ever.
Hi Razor. I think you will lose the crowd here with your analysis. I agree with you. This sucker is cheap. And it incorporates far too much discounting of the doomsday scenario. This company is still kicking out a tremendous amount of EBITDA, and it is cheap on an enterprise multiple for sure. Simple people try to find simple comparisons, but as you point out it is apples to oranges.
Yes, history repeats itself again. Pps should go 20s in a month or two. I doubt they can make any money in future quarters.