Jackpot Joy PL (JKPTF-5)

(A Top Pick Aug 19/16. Up 20.39%.) This was taken out of Canada and put into England which is one of the most important gambling areas in the world. The sector trades at 15% in the UK, and this trades at 5%-6% in Canada. This is social gaming rather than hard gambling.

(A Top Pick Aug 19/16. Up 11.11%.) (Formerly Intertain) This is probably going to be very, very successful in London, once it can get recognized.

(A Top Pick March 29/16. Up 3%.) Online bingo. He still likes the company and owns a small amount.

There is a lot of hype around these names and the financing deals they are doing. A very confusing story to get your head around. They have a lot of debt on their balance sheet. There are better investment opportunities, particularly in the market we are in right now.

A very unusual situation. It has gone through an interesting renovation with a new management, after the 1^st management created lots of acquisitions, boosted the sales line up to about $500 million. A very serious social gambling type company. The newcomers are 2 Brits who have come out from the very much bigger British sector. They are going to take it back to the UK where it should belong, where it will stand out as the great gaming company for the ladies mainly. (Bingo)

(A Top Pick May 15/15. Down 41.41%.) The stock has declined significantly, and they are trying to figure out what to do with the company. Trading at 5 X PE. He would give this a pass.

Thinks 80% of their revenues are coming from the UK, so clearly in Q2 they are going to have a foreign exchange impact. Have put themselves up for sale.

The CO and CFO resigned a number of months ago over some compensation issues. The board felt that the best way to deal with this would be to put the company into play to be acquired. Expects there will be an update on this in the next few days.

Really cheap 3 months ago and then news of the strategic review came out and there was a nice little pop on the shares. There is a lot of uncertainty going on right now. They pushed back their AGM because at the end of June they are going to come out with an announcement of whatever’s happening with their strategic review. But now with the BREXIT vote, his worry would be that whatever deal was in the works, it is either being put on hold or being quashed. Too much uncertainty for his taste.

Has been tainted with the Amaya (AYA-T) brush. Had a Short attack which drove the stock down to $8. Should they be successful in finding someone to take them out, a price range of $17-$20 is probably not a stretch. A moderate growth business, but the free cash flow they generate is massive and should be commanding a much larger premium than what it is getting. Expects there will be a full take out of the company.

The company is up for sale, but it has been a long time coming in terms of getting any news. Meanwhile they continue to deliver the goods in terms of earnings. Very, very cheap. The valuation is attractive. The stock is worth more than what it is trading at now on a takeover.

Has always been leery about this name, largely because of their former management. Paid themselves about a $16 million bonus last year, which didn’t impress him. That was one of the catalysts that helped to bring down all the online gaming stocks. Not interested in this as either a Short or a Long.

It is an area of frustration. The on-going soap opera that comes out of AYA-T taints the other two in this space. It is guilt by association. It is a good business. 5-6% weighting in his small cap fund.

This got caught up in the Amaya (AYA-T) selloff, although the insider trading situation has nothing to do with this company. They have effectively put all or part of the business up for sale, and when he does a “sum of the parts” analysis, he can’t get a scenario where it is going to be less than $16-$18.

The upside is huge based on their earnings forecast. They were damaged with what happed to AYA-T. These stocks are cheap. They are good value. There is regulatory uncertainty, particularly in the US. Those walls are coming down, however.