International Game Technology (IGT)

ddberg (25.47) Submitted: 5/29/08 10:50 AM : Start Price: $35.29 IGT Score: -35.58

Times are likely to be tight in Vegas (and other gambling destinations) for 2008 as disposable income gets squeezed, and that's likely to filter down from the casino owners/operators down to the suppliers, like IGT, with 70%+ market share in the slot machine business. But we're roughly 12 months away from the start of the next replacement cycle of gaming equipment in most casinos, which even if slightly stunted by some casinos' desire to cut spending, is still going to be a boom revenue/earnings period for IGT. As an added catalyst, IGT is in the process of installing their first server-based machines in Las Vegas -- a huge value-add concept for an industry that is masterful in their ability to constantly monitor and manage what's going on on their gambling floors in real time -- which could have a revolutionary impact on the electronic gambling machine business. If interest in this technology takes off like it's expected to once the first system is up and running, it could mean 2009 and 2010 are far beyond analyst expectations for IGT. Again, 2008 could well be a slow year, but an Outperform call for the 2-4 year time frame seems like a good bet (pun intended) to me.

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