With returns that show a 127% return per annum in Canadian land-based gambling stocks, and a massive 255% in Canadian e-gaming stocks, some gaming industry investors are really hitting the Jackpot in instruments that literally get you to laugh all the way to the bank. In a report by analyst Robert Winslow of Wellington West, a C$10,000 investment in Canadian land-based gambling stocks would have earned nearly C$23,000, a 127% return, while the same investment in Canadian e-gaming stocks in January, 2004 would have earned C$35,529, a return of 255%. A comparison with a similar investment at the Standard & Poor TSX index would have returned a very poor 15%.

The report published on the Canadian site The National Post points to a global trend where Canadian stocks are seen to be leading the way. On a bullish note, Winslow recommends three gambling stocks trading on the TSX: Great Canadian Gaming Corp. with a C$60 target price, Chartwell Technology Inc. C$12, and FUN Technologies at C$6. Winslow made the point that Great Canadian Gaming, which operates casinos in British Columbia, has agreed to purchase Georgian Downs, an Ontario casino, and is poised to extend its racetrack holdings beyond British Columbia. As a result of this C$48-million acquisition he increased his fiscal 2005 and 2006 estimates to C$1.93 and C$2.70 from C$1.88 and C$2.62.

Chartwell, meanwhile, is set to benefit from the recently approved Gambling Act 2005 in Great Britain, which has regulated e-gaming, and will see the domiciling of leading online casinos and betting companies in the country. The British Gambling Bill, which received Royal Assent last week, will help ensure e-gambling sites are operated fairly. This should help the valuations of legitimate companies in the sector, and Winslow advised that he had upped Chartwell, which makes Internet gaming software, from 'buy' to a "strong buy", increasing his target price for the stock from C$10.50 to C$12.

Although FUN Technologies, an online gambling provider, had a poor fourth quarter with revenues falling well short of estimates, it is estimated that the British company could improve its fundamentals through acquisition activity. Successful execution could take the stock as high as C$8 - 50% above its current price. At the end of trading yesterday, Great Canadian Gaming closed at C$53.72, up C$1.60, Chartwell at C$9.02, down 3 cents, and FUN Technologies at C$5.35, up 35 cents. (E-04.15.05)

© Copyright 2005 CasinoCompendium



>>> return to archives
>>> return to frontpage