Scientific Games Popped: What You Need to Know

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Scratch-and-win ticket and lottery infrastructure specialist Scientific Games (Nasdaq: SGMS  ) popped more than 15% in intraday trading Tuesday after announcing plans to reinstate its former chief executive as the CEO.

So what: At the request of the board, chairman Lorne Weil will return to the CEO position he held from 1992 to 2008, while CEO Michael Chambrello will assume a new role as the head of Scientific Games' Asia-Pacific region. The move, according to Weil, was made "to devote significantly more senior management time and personnel to further developing [the company's] China business."

Now what: Scientific Games has struggled with a lack of focus in recent years, but the personnel changes seem like a step in the right direction. While the company's casino system business continues to face increasingly tough competition from the likes of International Game Technology (NYSE: IGT  ) and WMS (NYSE: WMS  ) , today's announcement serves as a much-needed commitment to where the growth prospects are, by far, the juiciest -- lotto-ticket services in China. I'd be uncomfortable about jumping in today, but any pullback might be a good opportunity to play the turnaround.

Interested in more info on Scientific Games? Add it to your watchlist.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days.

True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community. The Fool's disclosure policy always gets a perfect score.

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10/21/2016 2:51 PM
IGT $28.44 Up +0.06 +0.21%
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