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Will Take-Two's News Give Shares a Headache?


They could take a pummeling in today's session.

Today is Friday, which means the weekend is only a few short hours away. But even more importantly -- it's Festivus day! I'll see you all there!

Asian stocks were a bit of a mixed bag. The Hang Seng closed down 0.25%, but the Nikkei ended up 0.45%. Europe however was in negative territory early this morning. And here in the US, we're currently trading higher.

Here's what I'm seeing this fine Friday morning:

Take Two (TTWO):
Take two aspirin and call me after the close.

The game company was out with a little financial update after last night's bell. And unfortunately, it didn't offer up the most terrific news: For the fourth quarter, it's looking for an adjusted profit of $0.05 to $0.10. The trouble is, that's below its previous outlook and a country mile south of the $0.33 estimate I'm seeing.

Some thoughts:

1. Decent company, but I don't understand what's been keeping the shares in the double-digits. Given this announcement, I'm figuring that analysts will probably take down their estimates. I'm also expecting the shares to take a decent pummeling in today's session.

2. Back in September after the company released its third-quarter numbers, I said if the shares came down to the single-digits I might change my tune. Well, I get the feeling the company could indeed be seeing single-digits today. I'm reluctant to dip a toe in the water today, though: From my experience, falling knives tend to be sharp. My hunch is to wait for the hubbub to die down a bit, then re-evaluate.

Marvell Technology (MRVL):
The chipmaker was out with its third-quarter numbers, and I thought they were pretty darn good.

Excluding items, it put up $0.35, which was well ahead of the $0.27 estimate I'm seeing. To boot, it painted a decent picture for the fourth quarter.

This is the second beat in a row for the company, and it's exceeded Street expectations in three of the past four quarters. This, coupled with the outlook, makes me think the shares could be testing new 52-week highs today. In fact, I feel the shares have solid upside potential over the next year, and that they'd be more fairly valued north of $20.
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No positions in stocks mentioned.

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