6 stocks set to soar

A lot of retail stocks have suffered selloffs this year, as consumers cut back amid record gas prices, plunging home values, and rising unemployment. But the earnings of videogame retailer GameStop soared 162% in the quarter ended Aug. 2, riding a trend that so far has proven immune to the ills afflicting the broader economy.

Yes, investors are skeptical - the stock is down 21% since May - but therein lies the opportunity. Anthony Chukumba, an analyst with FTN Midwest Securities, calls the current videogame cycle - which has been driven by the popularity of titles like Guitar Hero, Grand Theft Auto IV, and a bevy of offerings for the Nintendo Wii - "by far the strongest one ever."

Citigroup analyst Tony Wible has a similar view, leading him to put a $66 price target on GameStop, which means he's looking for a 50% gain from current levels. And Wible also likes GameStop's used-game business, which tends to flourish when the broader economy slows.

The stock now has a P/E of 17, which is quite reasonable for a company expected to boost earnings nearly 40% in the fiscal year ending January. "Whether it's coming from the robust game cycle or from more people staying home and choosing a relatively economical form of entertainment - I don't know," says fund manager Jim Oberweis, whose Oberweis Mid Cap fund has a large GameStop position. "At this price, either way, we'll take it."

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