Buy - Price 8.10 on July 14
by MKM Partners

We would recommend that investors take advantage of the weakness in the shares of TTWO, as our expectation for significant EPS growth in FY10 and FY11 remains intact, and [the recent] reduced FY09 outlook does not have a meaningful impact on our core thesis. The delay of the Bioshock 2 [electronic game] until FY10 is very disappointing...[yet] this title, with sequel games Mafia II, Max Payne 3 and Red Dead Redemption, provides a compelling lineup, which we see as capable of generating $1 in EPS in a year...[Risks include] the soft retail market. We're maintaining an 11 target, based on an 11 times multiple off of our upwardly revised EPS for FY10, now at $1 -- [up from] 96 cents. Market cap: $629.2 million.

Smart business

Bottom Fishing

Sony in Red, Nintendo Cuts View: Sony fell into a quarterly loss and saw a record year in the red, while rival Nintendo revised its outlook lower but still eyed record profit.
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Ferreira recently raised his holdings to 6.13%. "Management has only been in place for six quarters," Ferreira says, "and it has been able to build up in excess of $4 per share in cash, it has a pristine balance sheet, and it has generated $2 in earnings [from operations] in the first three quarters of this year, up significantly from last year." Take-Two is best known for its hugely popular Grand Theft Auto game. While Take-Two management was criticized for not accepting a recent bid from rival Electronic Arts, "we applaud the decision," Ferreira says. The offer was too conditional to succeed, but would have given EA a chance to "look under the hood" of Take-Two's development projects, he says.

GTA

From a recent Mad Money show: "Ring the register in this one."

China Watch: Shanda's Got Game:
Standard & Poor's equity analyst Scott Kessler named online gaming one of the top two tech trends in China right now -- and says Shanda Interactive Entertainment is the stock to buy.

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Hedge-fund manager Steven A. Cohen cut his stake to about 3.38 million (4.4%) from 4.1 million shares (5.3%) reported on June 25. Cohen's disclosure comes as options traders question whether Electronic Arts (ERTS) will succeed in its $2 billion hostile bid for the video game maker and distributor. Cohen heads SAC Capital.

'Guitar Hero: Aerosmith' Rocks This Way: Kristin Bentz, The Talented Blonde, takes you backstage with the band for the much-anticipated release of 'Activision's Guitar Hero: Aerosmith.'

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Valution doesn't jive with reality

Short - Cramer

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