CryptoLogic Limited (USA) (CRYP)

crazykling (98.73) Submitted: 3/30/07 9:55 PM : Start Price: $23.95 CRYP Score: -55.53

Why CRYP is still a good pick.

1.)   Bill Mann still has it in his Best Buys - still.
2.)   Small market cap 346M. Almost like a pharmaceutical company (Bill Mann analogy) in that their cost are almost fixed to provide what they do. So new customers have ever increasing margin. Can I get a Borat – Very very nice.
3.)   $9.25 in cash for every $25 share, P/B 3.2, 33% equity.
4.)   13.84 P/E
5.)   Pabrai owns about 12%. He’s a value investor, buffetology, http://www.sec.gov/Archives/edgar/data/1094036/000101381607000138/xslF345X02/form4_pabrai-031407ex.xml
6.)   Playboy signed up with them. Can you imagine a cooler place to gamble?
7.)   With the 125M they have they have been or are A.) Making acquisitions B.) Share repurchase (although I haven’t scene as much as I’d like)
8.)   Potential (although some time out) for US to accept gambling because: Friendly democrat and republicans in all the right places of congress, WTO says it’s illegal to refuse Americans to the right to gamble at non-US entities if they allow it for US entities, well funded, well lobbied, land based casinos are generally open to it.
9.)   http://www.pokersitescout.com/CryptoLogic_SiteDetail.asp, base on the last 3 months of data it looks like they have more poker players than in Q4 and almost as much as they did Q3 (before US ban).
10.)    The Dutch agreement to provide state sponsored gambling really adds a new dimension of trust to CRYP, not to mention additional business.

I originally bought in the high teens and low 20s, when it had a low P/E, low PB, major recent decrease in price, the only thing it was missing is inside buying. There still isn’t inside buying, but I may be willing to reconsider that if the Pubrai investor keeps it up along with repurchases. The share price is back up where it use to be pre-9/30/06 but from a revenue point of view CRYP is will be there by Q3/07 take or give a quarter. I like the short term prospects for a more appropriate price, I like the long term growth potential for online gambling, I like the non-US dollar revenue to hedge inevitable decline of $, I like the fact it’s Toronto/Irish based and has government contracts which builds trust worthiness.

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