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Sibyl Fendley
Sibyl Fendley

Is Gamestop A Good Stock To Buy


Is Gamestop A Good Stock To Buy

In simpler words, GameStop shareholders of record on July 18 will receive three additional shares for each share of the company that they own following the close of trading on July 21. GameStop stock will start trading on a split-adjusted basis on July 22.

This makes GameStop the latest company to join the stock-split bandwagon. It is also worth noting that the shares have received a nice boost thanks to this move after underperforming the broader market for most of the year.

A stock split is a purely cosmetic move that doesn't do anything to change the fundamentals of a company. It simply increases the number of shares outstanding and reduces the dollar value of a company's stock price.

However, there is a perception that the lower dollar value following a split means that shares are now available to a wider pool of retail investors. As a result, the demand for shares could go up and send prices higher. This is probably the reason why the market got excited following the announcement of GameStop's stock split.

But investors shouldn't forget that GameStop's fundamentals and prospects remain the same as before. Additionally, a split isn't a guarantee of higher stock prices. Major companies with solid growth prospects haven't seen a bump in their prices following stock-split announcements. That's why an investment in GameStop shouldn't be based on a stock-split move. Instead, investors should closely scrutinize what the company's future may look like.

Investors should also be concerned about the market's low expectations for GameStop. The company's losses are projected to increase at an alarming annual rate of 48% over the next five years. Its median price target of $110 on Wall Street points toward a drop in the stock price. All told, GameStop looks like a stock-split play that investors may want to avoid.

The Style Scores are a complementary set of indicators to use alongside the Zacks Rank. It allows the user to better focus on the stocks that are the best fit for his or her personal trading style.

Within each Score, stocks are graded into five groups: A, B, C, D and F. As you might remember from your school days, an A, is better than a B; a B is better than a C; a C is better than a D; and a D is better than an F.

As an investor, you want to buy stocks with the highest probability of success. That means you want to buy stocks with a Zacks Rank #1 or #2, Strong Buy or Buy, which also has a Score of an A or a B in your personal trading style.

The ever popular one-page Snapshot reports are generated for virtually every single Zacks Ranked stock. It's packed with all of the company's key stats and salient decision making information. Including the Zacks Rank, Zacks Industry Rank, Style Scores, the Price, Consensus & Surprise chart, graphical estimate analysis and how a stocks stacks up to its peers.

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The Value Scorecard identifies the stocks most likely to outperform based on its valuation metrics. This list of both classic and unconventional valuation items helps separate which stocks are overvalued, rightly lowly valued, and temporarily undervalued which are poised to move higher.

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