General Investing
Gaming Suppliers are the Sure Winners in Market Expansion
December 10, 2010As some states consider legalizing casinos and gaming to replenish revenue streams, gaming suppliers will benefit from any expansion in the space, KeyBanc Capital Markets Analyst Dennis I. Forst says.
“Even though the replacement market and the economy are weak, we still are favorably disposed toward the gaming suppliers because no matter who wins the beauty contest, they are going to have to buy slot machines and table games,” Forst said. “And that’s a big opportunity for the IGTs (IGT) and WMSs (WMS) of the world.”
Forst says that of his top four suppliers, his favorite picks at current prices are WMS Industries and Shuffle Master (SHFL). He says WMS has the hottest games, the best balance sheet and the most technology, while Shuffle Master dominates as the table game supplier.
Forst adds, “IGT is the 500-pound gorilla, probably losing a little domestic market share, but given their huge library and their software content and also the R&D effort, they are continuing to make the international markets more important to them.”
