+ Watch IGT
on My Watchlist
The Company designs, manufactures and markets computerized gaming equipment, systems and services.
Good 3% dividend, 15 PE for a company that should grow
This company is very undervalued due to the mismanagement of the CEO of the past five years. Patti Hart is her name and she has saddled the company with an increased debt load. If she is ousted the stock could double.
The picture of IGT has changed recently. In particular its earnings have not been increasing as expected and as a result the stock price has come under pressure. That said, despite the earnings weakness its price remains undervalued.
IGT has several positive characteristics. First, it trades at fair valuation at ~ 8x EV/EBITDA. Second, the company sports a adequate dividend yield of > 2.5%. Third, the company has long-term ROE and ROIC metrics of > 20%. Fourth, management has been buying back stock (~15% in the past few years). Now, admittedly, near-term results have been challenging, but IGT real competitive advantages in its US gaming ops business (40% ship share) and systems business. Moreover, IGT made a smart acquisition of DoubleDown, which paved its way into online casino-like gambling (leverage its catalog of titles). I see an opportunity for reversion to the mean as a multi-year lull in replacement units unwinds over time and new gaming jurisdictions open (mostly int'l) in the next several years The market is currently discounting any positive developments (an investor as a free option on future growth) and the bad news is mostly reflected in the current price.
oversold on news, will bounce back
Oversold on a panicky day. They still make the most engaging slot machines.
1) New Jersey pilot internet gaming will spread state by state2) New tech/games =casino inventory turnover
Most people live to gamble, and online gambling is the future.
For reference point and to allow for comments by others. As of the end of March, 2013.ROE 20.38%Trailing PE 17.65PB 3.82Div yield 1.80%
#1 slot and video manu. J.Cramer
Basic busness model is growing quickly. Financial market has no understanding of IGT future market outside the U.S.A. IGT potential has not been understood by the financial community. Today!
People love to gamble. This is a play on the economy recovering and more demand for casino services and products.
I still like it long term considering the growth.Sucks if you placed your money in it after the crash, but could be an outperformer long term. I see other stocks in other sectors that *may* potentially fall in this catagory as well.Clarification: May underperform the market one year/may blow away the market the next couple.
Thesis here is that casinos are making the change from ticket-in/ticket-out slot machines. IGT is a best-of breed company at the leading edge of a replacement cycle.
Gaming equiptment and systems continue to evolve which means replacement of machines and systems.That pus international markets are expanding and need IGT products.
Original pitch from "11 O'Clock Stock" series. http://www.fool.com/investing/general/2010/10/01/todays-buy-opportunity-international-game-technolo.aspxTo see more about the series, watch this video from co-founder Tom Gardner:http://www.fool.com/investing/general/2010/07/22/introducing-11-oclock-stock.aspx
Lots of slot jockeys out there!
very low price-gambling will be legal in more and more states as taxes are needed
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