GameStop: Still In Business?

GameStop (GME) has been one of the more controversial stock ideas I've written up. Today, however, the stock is up almost 70% since it was first written up on this site. As such, GameStop becomes the latest company to join this site's Value In Action page.

Right from my first article on this company some three years ago (all of them are browse-able here), I began to receive a number of bearish comments on the stock. Short interest on this stock has reached upwards of 50%, with the very smart Jim Chanos among them. As a result, I think this investment illustrates some very important lessons that every value investor should remember.

iGo Buy This Stock; Where Do *You* Go?

Shares of iGo (IGOI) fell a whopping 35% yesterday, as the market soured on the company's latest financials and an announcement that a partnership with Texas Instruments (TXN) will not go forward. Value investors who are sitting on bloated cash positions thanks to the market's runup should probably take a close look at this one.

Edumacation

As for-profit education stocks have continued to fall in the face of market strength, I have become more and more interested in this sector. But every company I've come across in this space seems to have a at least one risk I'm not comfortable with. For example, Career Education Corp is dirt cheap, but could face huge liabilities from a previous life. Corinthian Colleges is also dirt cheap, but may have to seriously dilute its shareholders if a regulatory decision doesn't go its way.

Chocolates On The Pillow Aren't Enough

The Chairman of Loews Hotels tells the reader how to please the customer in Chocolates On The Pillow Aren't Enough. As the long-time chief executive of the luxury hotel chain, Tisch likely has a number of insights he can share about how Loews has identified ways to further connect with its customers and their wallets.

G. Willi Rises

Just six months ago, G. Willi-Food was brought up on this site as a potential value investment. The stock has since rallied some 65%, offering investors an excellent exit opportunity.

Repeatability by Zook

Chris Zook's Repeatability may be the worst business book I've ever read. It's not that this book about building enduring businesses did not make sense. Just the opposite, in fact; it made perfect sense. But to me that's why it is so potentially dangerous. It draws its conclusions (and therefore its advice) erroneously, in my opinion. But by making its conclusions plausible, it can probably convince a lot of readers to follow courses that may not be justified.

Distressed Debt Analysis

Equities are not the only area in which the principles of value investing apply. Investors of a value mindset can also take part in the debt market. But for most of the public debt that's out there, potential upside is low (how much above par can a company's debt trade? Not much). The situation is different for distressed debt, where securities can trade well below par. An investor who finds mis-priced distressed debt securities can therefore profit to a similar extent as an equity investor.

But distressed debt investing appears much more complicated than equity investing. Not only does one have to understand the business well enough to estimate its earnings power (as the equity investor must do), one must also understand the legal issues and motives of various other stakeholders. To help me understand these and other issues related to investing in debt from a value point of view, I recently read Distressed Debt Analysis by Moyer, which is kind of like a Securities Analysis for debt investors.