A new stock hit the top 25 this weekend and will be placed in my mechanical portfolio, which is doing pretty well. The stock is TTWO. For those that don't play video games, they are the manufacturer of Grand Theft Auto, a very popular game which gained some notoriety a couple of years ago when some pornagraphic scenes were imbedded in the code and could be pulled up by pressing a hot button. Wal Mart and other had to pull the game from their shelves.
The most recent news has been TTWO fighting off a hostile takeover a la Microsoft and Yahoo. Electronic Arts pulled their bid and thus Take Two dropped from about $22 to a hair over $16 where they closed on Friday.
Looking at the financials, revenues for Take Two seem very uneven. I guess they make a bunch of their money when a new edition is released.
I would not buy them in real life... I am not a big fan of their management. We'll see how they do in my model portfolio. But if EA wants them, there must be some intrinsic value and perhaps there is a higher bid down the road.
Oh BTW some one must've been listening to my "Where Art Thou?" last week. I see where KSW just came back on the top 25. Next up, WSTG.
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2 comments:
Marsh,
I just read your blog for the first time today. I read about half of the text from the past five months.
I have been seriously investing in mfi since October 2006, spending a lot of time analyzing the stocks for selections and following company news.
Your posts make me feel fortunate that my results haven't been worse.
Boiling down my results, I was very lucky with FDG (Fording Canadian Coal Trust) which was greater than a three-bagger in the 16 months I held it. However, I have bought many mfi stocks that have dropped by roughly 50%.
I'm wondering if the tough debt-financing conditions are hurting mfi stocks. These are stocks that are typically good buyout candidates and maybe they're doing poorly partly because buyout activity is low and likely to stay that way for a good while.
Regards,
David Cooke
Marsh,
Some comments on a couple of stocks I have been long on that you have written about: QXM and CHCG.
Have you see this blog that discusses CHCG? http://chinaotcplayer.blogspot.com/search/label/CHCG.OB
He has some interesting things to say about it.
Regarding QXM, did you see in their latest quarterly press release that they blamed the Sesuan (spell?) earthquake for some of their revenue shortfall for the quarter. This seems like a lame excuse, considering that revenue fell so much and the earthquake likely covered a small geographic footprint relative to their overall sales territory. This comment alone by their management makes me suspect the veracity of any of their other statements.
It will be interesting to watch these two companies to see if their revenues are higher one or two years from now. Given their high profitability, their share prices are bound to be much higher if they can maintain or increase revenues.
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