Joel,
A few thoughts from a former industry person. 80%+ of a title's sales occur within 4 weeks of launch. The curve is not unlike a new movie release. Bad movies stop cold after a few weeks, blockbusters are more gradual but the lines are always the longest in the first week.
Two of ELBO's greatest strengths are its relationships with the game manus and their distribution channel. ELBO consistently puts its new games on the shelves a week before anyone else. Gamers know this and that's where they get their loyal following. Their web site preorder capability makes it that much better. ELBO has other strengths too such as knowledgeable employees, brand strength, ecommerce site, etc but to avid gamers availability is everything.
Comp USA will compete with Target, Macy's, Walmart, and all those other dime store retailers. Also, new games are not discounted. Retailers will always sell through their inventory allotment. No incentive to leave money on the table.
As for ELBO's growth, their EPS growth comes in 4 areas. SSS, new stores, ecommerce, and new ventures. ELBO is strong in all 4 areas. They are executing well IMHO and managing their cash flow brilliantly. Industry growth looks good with the next generation products rolling out over the next 4-18 months. With the stock trading at 1/2 fwd P/E I would be considered it a strong value play. As with any investment, I would recommend that you read their annual report and talk to investor relations before committing funds.
Good investing,
TJ |
