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Why Scientific Games Corp's Shares Popped 11% in March

By Travis Hoium - Apr 8, 2016 at 8:28AM

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Two contract wins helped drive Scientific Games Corp shares higher last month, but is it time to buy?

Image source: Scientific Games.

What: Shares of Scientific Games Corp (NASDAQ: SGMS) jumped 11.4% in March, according to data provided by S&P Global Market Intelligence, after winning two new contracts.

So what: Scientific Games won a seven year contract in Denmark to run game solutions and services for Danske Lotteri Spil, the Danish lottery. It also won a five year contract with a separate firm, Danske Spil, to build interactive player accounts that will unify player data across channels. 

The company is also partnering with JACK Entertainment to bring games and customer solutions to three Ohio casinos. 

Now what: These contracts were nice wins for Scientific Games, but they're also business as usual. Shares may have been helped last month by a move higher in the gaming market in general, and gaming revenue is on the rise. Now that the company owns slot maker Bally Technologies, it's one of the biggest suppliers to the gaming market, and overall industry growth will help drive casinos to spend more on updating games. But keep in mind that Scientific Games is still losing money, and has $8.4 billion of long-term debt, so it remains a risky bet for investors. 

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