Take Two is a small publisher and distributor of a diverse portfolio of ...
Suggestion by Christian hunter on 2007-09-27 20:33:44
Take Two is a small publisher and distributor of a diverse portfolio of console and PC games. The most notable franchise TTWO has yet published is Grand Theft Auto. GTA 3 was one of the best selling games of all time, its add-ons and expansion packs brought revenue to nearly 1 billion dollars. The long awaited GTA 4 is due in the first half of 08, and every evidence suggests this will be every bit the hit GTA 3 was, or, quite likely, bigger.
That's however not why I believe (even after TTWO's recent 40+ % gain) this stock is undervalued. Those reasons are, principally:
1. It trades at a significant discount to its piers. For instance, ATVI will have (calendar year 08) revenues of 1.5 billion or so w/ profits in the 300mm range. TTWO could very well exceed revenues of 1.25b and profits of over 200mm. TTWO trades at 1/4th the valuation of ATVI.
2. Bioshock, Manhunt, and the Civilization franchises are proving that TTWO is no longer a "one trick pony".
3. The entire gaming sector is likely to enjoy significant and sustainable long-term growth. Next generation console bases are significant, and opportunities for international expansion are near endless.
This company is not without its problems, but I believe the problems are way over-discounting the value of this equity.
I believe this stock will trade over 24 in the next 12 months, with a fair value of $32+.
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This is a great bulls argument -- I'm adding it to that page. 64.121.197.178 20:45, September 27, 2007 (PDT)
