SGMS
Scientific Games Corp
Consumer
05/11/2015
Presented
| Date | 05/07/2015 |
| Price | $13.61 |
| Market Cap | N/A |
| Ent Value | $9.51B |
| P/E Ratio | N/A |
| Book Value | N/A |
| Div Yield | N/A |
| Shares O/S | 85.82M |
| Ave Daily Vol | 1,090,000 |
| Short Int | 18.51% |
Current
| Price | $94.21 |
| Market Cap | $8.36B |
| Scientific Games Corporation develops technology-based products and services, and associated content for the gaming and lottery industries worldwide. The company operates through three segments: Gaming, Lottery, and Interactive. The Gaming segment offers gaming machines, conversion kits, automatic card shufflers, roulette chip sorters, and spare parts; leases gaming machines, automatic card shufflers, roulette chip sorters, and server-based gaming systems and content; and licenses proprietary table game content. This segment also provides video lottery central monitoring and control systems and networks for gaming regulators; and casino-management technology solutions and systems. This segment serves commercial, tribal, and governmental gaming operators. The Lottery segment designs, prints, and sells instant lottery games; provides value-added services, such as game design, sales and marketing support, specialty games and promotions, inventory management, warehousing, and fulfillment services, as well as full instant game category management services; and offers licensed games, and promotional and interactive marketing services. This segment also provides lottery systems, including customized computer software, software support, equipment, and data communication services; and supplies proprietary transaction-processing software, draw lottery games, keno, point-of-sale terminals, central site computers, and communication platforms, as well as ongoing operational support and maintenance services. In addition, it offers instant game validation services; software, hardware, and related services for sports wagering and keno systems; and prints and sells phone cards. The Interactive segment provides interactive gaming products and services for social gaming and real-money gaming through desktop and mobile devices to online casino operators. Scientific Games Corporation was founded in 1984 and is headquartered in Las Vegas, Nevada. |
Publicly traded companies mentioned herein: Caesars Entertainment Corporation (CZR), Scientific Games Corporation (SGMS), International Game Technology PLC (IGT)
Highlights
The presenter thinks the risk/ reward setup with shares of Las Vegas-based Scientific Games (SGMS) is extremely skewed to the upside, and he is long the stock. CEO Gavin Isaacs previously ran the companies SGMS recently acquired, and is generally viewed as the best leader in the industry. Based on his model SGMS has the potential to generate $4 of FCF per share next year, and as much as $7 of FCF per share over the next two to three years. If the presenter’s estimates prove to be accurate, the company will be able to delever and the market multiple should expand, potentially dramatically.
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