One analyst’s choice: slot maker WMS
With all the negative news in the gaming industry — MGM Mirage troubles, Harrah’s Entertainment sinking, Herbst Gaming filing for bankruptcy and Station Casinos on the way — maybe a little positive feedback is needed.
Macquarie Securities gaming analyst Joel Simkins thinks slot machine maker WMS Industries is ready to break out.
In a recent report to investors, Simkins said the Illinois-based WMS has the financial stability to weather the tough climate.
“Despite industry headwinds, we remain bullish on both the near- and long-term outlook for WMS,” Simkins told investors. “WMS’ balance sheet is rock-solid with $118 million of cash and virtually zero net debt.”
Like other gaming companies, WMS has seen its stock price falter from a 52-week high of $40 a year ago down to a 52-week low of $15.48 earlier this month.
On Monday, shares of WMS, traded on the New York Stock Exchange, closed at $22.01. Only Wynn Resorts and Penn National Gaming have a higher per share price within the gaming sector.
Simkins thinks the company could take away market share from industry giant International Game Technology and Bally Technologies.
“While we see other industry players spinning their wheels given weak new unit and replacement demand, we think WMS can continue to churn out solid results near-term,” Simkins said.