Shares of Bally Technologies
How it got here
Results have been improving at Bally because of expanded gaming in nearly every market around the world. Domestically, gaming has expanded into new locations and recent years have seen a rapid expansion of gaming in Asia. In the most recent quarter, higher selling prices of products in international markets were one of the main drivers of strong revenue and profit.
This expansion in gaming has helped Bally but hasn't translated to stronger results for all gaming equipment makers. International Game Technology
Compared to its slot-making competitors, Bally is performing like a dream. IGT and WMS have both seen revenue fall in the most recent quarter, and that's why Bally is touching a 52-week high and they aren't.
Quarterly Revenue Growth
Forward P/E Ratio
|International Game Technology||(1.3%)||13.3%||13.6|
Source: Yahoo! Finance.
Shuffle Master tops Bally's growth, but that's partly due to a trend toward table games in Asia and high shuffler demand.
Bally has been firing on all cylinders recently, but the expansion in gaming is slowly coming to a halt. Macau won't open a new casino until at least 2015, Singapore isn't expanding, and U.S. operators aren't having a great deal of success so expansion should slow here. Outside of Las Vegas Sands'
The CAPS community has given Bally a one-star rating, and I have to agree that the run may be over. There aren't a lot of catalysts that will drive the stock in the next year or two, and competition could heat up from underperforming slot competitors.
Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.
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