How about a good game software company? This would seem to be a risky business but then again, maybe all companies have risk! Anyhow, Take-Two (TTWO) "...designs, develops, publishes, markets and distributes interactive software games for use on multimedia personal computer and video game console platforms" according to money.cnn.com. TTWO is having a GREAT day today trading as I write at $35.75 up $6.00 or 20.17% on the day.
As with so many of the stocks we cover on this site, TTWO jumped today on positive earnings news: net sales for the third quarter ended July 31, 2003, were $155.6 million a 27% increase over $122.5 million for the same period a year ago. Net income was $7.7 million, an increase of 60% over last year's $4.8 million with diluted net income per share of $.18, a 50% increase over the $.12 reported last year. All of this was reported on the NYTimes on the Web.
Morningstar.com shows a history of revenue growth from 1998 when $194 million in revenue, $305 million in 1999, $364 million in 2000, $449 million in 2001, $794 million in 2002.
Free cash flow has been solid as reported on Morningstar: $(57) million in 2000, $19 million in 2001, $135 million in 2002 and $130 million in the trailing twelve months.
Looking at assets/liabilities on Morningstar we find this company sitting solidly in a cash position with $188.4 million in cash on hand more than enough to cover both the current liabilities of $129.7 million and the small $6.3 million in long-term liabilities combined. In ADDITION, TTWO has $205.1 million in other current assets.
TTWO has a market cap, per Yahoo, of $1.24 billion with 41.7 million shares outstanding and 40.8 million of them float. No dividend is paid. Considering the growth, the company is downright cheap with a p/e of 13.43 and a price/sales of 1.31.
To top it off, there are LOTS of shares out there short, for me a BULLISH indicator. As of 8/8/03, per Yahoo, there were 8.77 million shares out short representing 21.5% of the float or 10.62 days of average trading volume.
In summary, this stock looks GREAT. They have steady revenue growth, an outstanding latest quarter, gobs of free cash flow, lots of cash easily covering their liabilities, a cheap p/e, and a low price/sales ratio and lots of people betting AGAINST this stock who will need to buy shares to eventually cover their short positions. In fact, if I can find some cash, I may very well buy some shares soon.
As of now, I do not own any shares of TTWO.
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Bob