The Stars Group Inc (TSGI.TO)

This is a group that he generally avoids. It can drop 10%-15%-20%. Too flighty for him. It is subject to news and there is possible disruption as well.

(Top Pick Mar 3/16, Up 22%) They are meeting a demand in online gambling. They are heavily into sports gambling which has proved to be a strong area for them. The kicker is that they have to be approved state by state. They started in New Jersey which took 2 years and now other states are warming up much more quickly. There is substantial potential for growth.

Think you have a better chance of making good today than you would have a year ago. They have a much stronger footing today. Online gaming, particularly in the poker space, is big globally; not in the US yet, but will eventually be there when regulations change. Not an expensive stock and thinks the company has the right parameters to move the share price higher. Feels $29 is a possibility.

Most of their previous problems have been resolved. The former CEO still owns 17%-18% of the company, and that is not going away until he Sells, but he is not involved with the company. The opportunity of online gaming looks good in Europe, and the growth should be there. The valuation has dropped enough that it is kind of attractive on a fundamental basis. However, the US is much slower, and the take-up on online gaming has been much slower than anticipated, and that is a drawback. They have a new president. Maybe something will change in terms of regulatory issues. However, fundamentals are pretty good. A growth company with a lot of debt, but it is priced right. If you just ignore the whole past 18 months, it looks pretty good. Doesn’t think a whole lot is going to happen in the short term. If you own it, he wouldn’t buy any more. If you don’t own it, you could consider it.

The rumoured takeover by the former CEO, Mr. Baazov has now officially gone away. He has a small Short position, and a somewhat negative view on the poker market. They have growth opportunities in expanding into sports betting and casinos, but those are pretty competitive markets, especially in London and Europe. This is fully valued.

At this stage, this is something you want to be cautious of. There have been some interesting developments on an insider trading case. The takeover doesn’t seem all that bulletproof as far as financing goes. Also, there could be some regulatory issues. He would be cautious here and not get involved.

This is playing out like a movie. He couldn’t believe the recent news with the ex-CEO and the offer by the company. Apparently, he has letters of content with some Hong Kong people, where the deal looks like it is going to get done now. An interesting risk/reward, where assuming the deal doesn’t get done, it will maybe drop down to around $18-$19, but if it gets done at $24, it gives you a 20% upside. He wouldn’t assume that the deal is a sure thing, given what has happened in the past.

He had been short before these takeover rumours -- long positions before that. They have taken on a lot of debt. If growth comes through, then they will have the ability to pay down debt and the stock will be a winner, but he is not convinced there will be growth. It is a good brand, but online poker is flat to down.

(A Top Pick Oct 20/15. Down 23.44%.) It had been down more than that until last week when there was talk about a merger with a British company. This company has done all the right things. They’ve gone into the US, and spent a lot of time going through the New Jersey gaming commission to get approval for online gaming in New Jersey. New Jersey has saved all the other states from going through the same process, so he is waiting for more states to come on stream. The more they do, the higher this stock will go. Long-term, this is an interesting company.

There was a taint on this due to the previous CEO who resigned. You are now left with a business where they are they market leader in a declining business (poker), but are going to be offsetting that. This has so much animosity that it would be a Sell. (See Top Picks.)

This no longer meets his criteria. Gaming stocks make him nervous because they operate in a space that is heavily regulated which he has little control over.

(Market Call Minute.) With a management shakeup and what is going on with the stock, it’s a little too risky.

(A Top Pick Sept 15/15. Up 28.99%.) (A Pairs trade. Long NYX and Short Amaya.)

He likes the stock. It is on his buy list. The valuation is cheap. They should keep on generating new numbers. They were accepted by New Jersey so it has thrown the rest of the US open for the regulatory scrutiny process for online gaming. Management is still talking about buying the stock in, so hopefully the earnings will come through their business strategy, or management will Buy the stock in at BV, dirt cheap.

(Market Call Minute.) This is going through a strategic review process. He would be cautious. He has some exposure through some preferred securities.