This year's March Madness has been predictably unpredictable thus far. I thought I'd be scrambling to cover myriad tournament upsets in this upstart series of mine, and here I am covering the third and final one. The seventh-seeded UNLV Rebels ran circles around the No. 2 seed, Wisconsin, in the Round of 32. The Runnin' Rebels almost doubled it up with a valiant comeback effort against Oregon in the Sweet Sixteen.

What does this have to with investing, you ask? Perhaps you missed installments one and two of "Upset City." In this series, I scour the hometowns of tournament underdogs in search of native businesses that our Motley Fool CAPS community may similarly be dismissing too hastily. I then make an upset call on one low-ranked stock that I think will beat the S&P 500 over the next year.

I may be setting myself up for failure here -- CAPS, which compiles more than 25,000 Fools' sentiments regarding thousands of stocks, is kind of like a giant Foolish brain. (You've joined CAPS by now, haven't you? It's free -- which is almost as cool as free money.)

Investors' paradise
If you didn't catch it, UNLV stands for University of Nevada, Las Vegas. The school is technically located in unincorporated Paradise, Nev., as is the majority of the Vegas Strip. The mailing address in Paradise reads Las Vegas, however, so we're going to lump them together, even if some of you have had a less-than-idyllic experience at a blackjack table.

As you might imagine, tons of casino operators and other gaming companies are based in Vegas. Most make out fairly well with our CAPS players -- Rule Maker MGM Mirage (NYSE:MGM) and Motley Fool Hidden Gems recommendation Ameristar Casinos (NASDAQ:ASCA) have earned three- and four-star rankings, respectively.

Fools are a bit less sanguine toward Wynn Resorts (NASDAQ:WYNN) and Pinnacle Entertainment (NYSE:PNK). Both of these companies, which sport two-star rankings in CAPS, have been covered thoroughly in Fooldom. I've got little to add, save for noting that Wynn has tacked on another $1.25 billion to its market cap since fellow Fool Emil Lee estimated that it lacks a margin of safety for value-seekers. I'm not going to drop my upset call on either of these casino operators.

How about gaming technology companies? In this area, we have two CAPS laggards: Bally Technologies and Progressive Gaming. Bally is the No. 2 slot-machine maker, and it's banking on a shift toward higher-margin software revenue to win share from market leader International Game Technology (NYSE:IGT). Similarly, Progressive Gaming is looking to divest its table-gaming business in order to home in on systems that support electronic gaming.

The market handed Progressive a bad beat on Monday -- its shares dropped as much as 28% at midday, on fears of bankruptcy stemming from an uncertain legal settlement. While an AP story may have spurred overreaction, arguably taking one of the company's reported risk factors out of context, I'd still stay far away from Progressive. The company isn't even generating enough cash to pay the interest on its debt, let alone the contingent claims of various litigants.

And how is Bally doing? It's hard to say, because the company isn't current with financial reporting, because of material weaknesses in internal controls. The most current financials, however, don't look pretty. The company, while unprofitable, was cash-flow positive in 2006. However, it barely generated enough EBITDA to stay under the upper limit of its leverage ratio -- defined as average debt-to-trailing EBITDA -- allowed under its debt covenants. Release the lever and step away from the slot machine, Fools. The odds are not in your favor here.

Airlines: They don't all go bankrupt
My first thought while reading up on recent IPO Allegiant Air, the airline subsidiary of Allegiant Travel Company (NASDAQ:ALGT), was that I would never fly on an airline that claims to be "certificated." Then I discovered that "certificated" is a real word, and relaxed a bit.

Allegiant Air flies budget-conscious vacationers from about 50 small U.S. cities to Las Vegas and two major hubs in Florida. In addition to scheduled flights, the airline offers charter services in partnership with soon-to-go-private Harrah's Entertainment (NYSE:HET). The airline offers various services to drive ancillary revenues, the largest source of which is the sale of hotel packages through Allegiant's other subsidiary, Allegiant Vacations.

The stock broke out of the gate in its IPO and hasn't looked back since. It's now up a quick 82% since early December. Is there a remaining boost for investors left behind on the tarmac? Capacity, measured in the industry by the available-seat-miles metric, is growing rapidly, and analysts expect earnings to soar by well more than 100% in 2007. The company stated in its earnings release that it's comfortable with those estimates. In that light, the stock doesn't look too obscenely priced for a high-growth story. I also like that Maurice Gallagher, Allegiant's founder, chairman, and CEO, hasn't sold a share.

I'm hesitant to place an outperform call on a company so dependent on discretionary income, given my biases about the seemingly tenuous condition of the U.S. housing market and the overstretched consumer. It's certainly not the kind of company I'm looking to add to my real-life portfolio right now, but the company does appear to have many years of reasonably assured high growth in its future. So there it is: I'll place my outperform call today and take a look back when Upset City resumes next year. Enjoy the Final Four, Fools.

Interested in other high-octane investing opportunities? Why not check out the Motley Fool Rule Breakers newsletter -- a 30-day trial subscription is free. Kind of like those drinks in Vegas, but you'll be making much clearer decisions afterward.

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Fool contributor Toby Shute was pretty sure Kansas was going all the way this year. Oh well. He is presently ranked 2,055 in Motley Fool CAPS. The Motley Fool has a certificatable disclosure policy. OK, you got me -- that one's not an actual word.