Mark Travis’s Intrepid Capital Management’s Top 5 Stock Picks

2. Take-Two Interactive Software, Inc. (NASDAQ:TTWO)

Intrepid Capital Management’s Stake Value: $9,047,000

Percentage of Intrepid Capital Management’s 13F Portfolio: 4.77%

Number of Hedge Fund Holders: 55

Take-Two Interactive Software, Inc. (NASDAQ:TTWO) is a video game holding company that owns flagship labels like Rockstar Games and 2K, which operate game development studios. Take-Two Interactive Software, Inc. (NASDAQ:TTWO) also supports private game developers under the company’s expansive labels. Intrepid Capital Management owns 51,110 shares in Take-Two Interactive Software, Inc. (NASDAQ:TTWO), valued at roughly $9 million, representing 4.77% of the firm’s Q2 portfolio. Some of the signature video games by Take-Two Interactive Software, Inc. (NASDAQ:TTWO) are Grand Theft Auto, BioShock, and NBA 2K, among others. 

On November 3, the Q3 EPS for Take-Two Interactive Software, Inc. (NASDAQ:TTWO) came in at $1.63, beating estimates by $0.26. The revenue also surpassed estimates by $109.16 million at $984.85 million. 

At the end of the second quarter of 2021, 55 hedge funds were bullish on Take-Two Interactive Software, Inc. (NASDAQ:TTWO), up from 41 in the preceding quarter. 

JPMorgan analyst Alexia Quadrani on October 27 raised the price target on Take-Two Interactive Software, Inc. (NASDAQ:TTWO) from $190 to $200, keeping a Neutral rating on the stock. 

Here is what Merion Road Capital Management has to say about Take-Two Interactive Software, Inc. (NASDAQ:TTWO) in its Q2 2021 investor letter:

“Take-Two also announced strong earnings and long-term outlook. While last year was a bit of an anomaly, it’s impressive that their key franchise (Grand Theft Auto) grew revenue from $700mm to almost $1bn in the fiscal year – keep in mind that it has now been over 7 years since their last full game release. Similarly, the NBA 2K franchise has continued to grow its user base which now stands at 2.3mm daily users. As the business model continues to shift to more recurrent spend, now at 60%, TTWO revenue becomes more stable, higher margin, and less dependent on key man risk. Additionally, the company has many shots on goal to generate a windfall from IP with a pipeline of 60 games to be released over the next 3 years (9 of which are iterations of previously released titles, ergo less risky).”