Trying to avoid the debt orgy that typifies gaming properties? Want to participate in the gaming explosion around the world? Take a look at Gaming Partners
These products sound low-tech, but, in today's world, security is not just at the airport. Gaming Partners is adding microchips to chips, dice, and playing cards to prevent counterfeiting and cheating. Casinos benefit in other ways, too. There is no need for manual counting. Chips can be automatically counted in a pile, stack, or tray.
When people hear of radio frequency identification (RFID) technology, they think of Wal-Mart
The company's third-quarter results were upbeat. Revenue increased 30%, and, while there was a modest $101,000 loss, the company is still showing a $0.18-per-share profit for the first nine months.
Gaming Partners sells for three times sales and, with only 7.6 million shares outstanding, carries a modest $135 million capitalization (and more cash than debt). For comparison, International Game Technology
Gaming companies are buried in debt. New gaming companies such as Wynn Resorts
Gaming Partners has all the characteristics of a budding Hidden Gem. Seventy percent of the stock is owned by insiders or people with more than 5% ownership. The company has a patent-protected technology that is being sold to a growth market. Finances are solid, and the company is followed by one analyst who sees 2005 profits almost doubling to $0.65 a share (27 times forward earnings).
Add it up -- automatically. Gaming Partners is a small but established company with unique technology that should see rapid growth in the coming years.
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Fool contributor W.D. Crotty does not own stock in any of the companies mentioned -- but he does have a casino chip in a drawer somewhere.