Hedge fund manager Greenberg sees 40% upside to gamemaker Take-Two

Key Points
  • Samantha Greenberg is optimistic on Take-Two's upcoming games such as "Red Dead Redemption 2."
  • “Engagement with videogames continues to grow, " she said. “While we’re bullish on the entire sector, we believe Take-Two has the biggest upside."
Samantha Greenberg, Chief Investment Officer, Margate Capital Management 
David A. Grogan | CNBC

Hedge fund manager Samantha Greenberg is a big believer in gamemaker Take-Two Interactive.

She said the company is her best stock idea at the Delivering Alpha Conference in New York on Wednesday.

“Engagement with videogames continues to grow, " she said. “While we’re bullish on the entire sector, we believe Take-Two has the biggest upside."

Her base case price target for Take-Two is $176, representing nearly 40 percent upside from current levels. She said the company's upcoming games such as "Red Dead Redemption 2" will drive strong revenue growth in the coming years.

“Take-Two content pipeline is the largest in the company’s history, " she said. Take-Two "trades at a discount to its peers, despite industry leading growth."

The investor is also optimistic trends and shifts in the videogame industry will also increase Take-Two's earnings per share and profit margins.

The "industry is shifting to a recurring revenue model," she said. “We expect streaming of games to become a commercial reality" in a few years.

Greenberg is the founder and chief investment officer of Margate Capital Management. Margate pursues a thematic, catalyst-driven fundamental long-short equity strategy focused on investments across the technology, internet and consumer sectors. The firm oversees $216 million in asset under management, according to its latest investment advisor filing.

VIDEO1:0801:08
Samantha Greenberg's best idea at Delivering Alpha: Take-Two Interactive