by Hilary Kramer | February 24, 2013 9:13 am
“Winner, winner, chicken dinner!” An odd phrase, to be sure, but, boy, does it sound sweet to my ears. Now, I’m not a big gambling woman (although my profession may suggest otherwise!), but I sure do love to place bets. I just choose to bet on stocks instead of dice. But just because I don’t spend a lot of my time in a casino doesn’t mean that I wouldn’t take a chance on one. Just the opposite! And I’m not the only one. Casinos are not only attracting a lot of visitors these days, but also a lot of investors.
Take a look at Macau Casinos, owned by Las Vegas Sands (NYSE:LVS). The company’s recent earnings report revealed record financial results for the Macau property, giving LVS a nice 6% pop following the announcement. Their competitors haven’t done too shabby either. MGM Resorts (NYSE:MGM) and Wynn Resorts (NASDAQ:WYNN) are expanding further into Asia to bring home big profits.
But am I investing in any of these companies? Nope! I’ve got my eye on a different “game” changer, one that is in a great position to benefit as gaming continues to grow, especially in foreign markets. Casino gambling is a global industry, but online gambling is also now seeing tremendous growth.
According to industry consulting group HS Gambling Capital, global online gambling revenues increased an average of 23% each year since 2003, and were in excess of $36 billion in 2012. Some brick-and-mortar casino executives believe they can attract younger online gaming users by developing personalized experiences that can be accessed by laptop, smartphone or tablet. This opens up a whole new world of potential for the industry.
So let me introduce you to SHFL Entertainment (NASDAQ:SHFL), a company with a product portfolio designed to make casinos more efficient while also enhancing the players’ experience, and takes pride in anticipating the changing needs of the industry. The company consists of four main operating segments: utility, Electronic Gaming Machines (EGM), Proprietary Table Games (PTG), and Electronic Table Systems (ETS).
The company’s Electronic Gaming Machines in particular have done well in Asia. It includes online versions of the company’s table games, social gaming, and mobile applications. The company has approximately 30 games in use on casino floors, many of which feature progressive features such as bonuses and side bets. SHFL derives revenues from this segment through licensing and royalty payments from casinos that use these games on their floors. EGM presents a significant opportunity for growth, especially in European markets where such gaming is legal.
Investments in casino companies are becoming more and more popular, and if you bet on the right company you could end up a winner. However, for my money, SHFL is the most attractive bet. With solid growth over the past five years, SHFL has tremendous growth potential and strong fundamentals to help lock in big profits.
Source URL: http://investorplace.com/2013/02/placing-bets-on-casino-stocks-lvs-mgm-shfl-wynn/
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