Zacks Analyst Interview Highlights: GameStop, Priceline.com, JC Penney and Cost Plus

Business Wire, August 18, 2008

CHICAGO -- Zacks.com releases the latest Analyst Interview. Today's interview is with senior analyst Rob Plaza, who discusses GameStop (NYSE: GME), Priceline.com (Nasdaq: PCLN), JC Penney (NYSE: JCP) and Cost Plus (Nasdaq: CPWM).

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Which companies are weathering the economic storm best thus far? Tell us about your top Buy recs.

Shoppers are still looking for value and ways to stretch their dollar. The most obvious plays have been the discounters and wholesale clubs. I'll give two additional companies that offer value to their customers. One is my longtime favorite GameStop (NYSE: GME). Video games remain wildly popular (sales are up 36% in first half of 2008), due in part to their value for the dollar.

Compare buying a new video game to other entertainment choices such as a movie or amusement park. At $60, a new video game may look expensive, but it provides hours upon hours of entertainment for the players. In that light, video games are a cheap source of entertainment.

Another pick is Priceline.com (Nasdaq: PCLN), which is an online travel services firm. People still want or need to travel, and Priceline.com offers its customers deals on airfare, rental cars and hotels both here and abroad. Plus, they have William Shatner as their spokesman.

Any types of retailers that should continue to be avoided in the near term?

I would avoid those companies from which consumers are trading down, those with inventory problems and those with leveraged balance sheets. Specifically, I have Sell recommendations on JC Penney (NYSE: JCP) and Cost Plus (Nasdaq: CPWM). JCP shares are up about 45% off its July lows. JC Penney will continue to feel pressure from customers trading down to lower cost alternatives. Cost Plus is an overleveraged home furnishings retailer that has 25% of its stores in California. No reason to own this stock.

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